America’s Morgan Stanley financial services firm says demand for wine ‘exceeded supply by 300m cases in 2012’ describing it as ‘the deepest shortfall in over 40 years of records’.
Wine production has been decreasing since 2004, while consumption has been rising since 1996 (except a drop in 2008-09), and presently stands at about 3bn cases per year.
There are currently more than one million wine producers worldwide, making some 2.8bn cases each year.
The report by Morgan Stanley’s analysts Tom Kierath and Crystal Wang says predict that, in the short term, ‘inventories will likely be reduced as current consumption continues to be predominantly supplied by previous vintages’.
They add: ‘Expect the current production shortfall to culminate in a significant increase in export demand, and higher prices for exports globally’.
Declining production in Europe and poor weather are cited as some of the reason why production is on the decline.
Total production across the continent fell by about 10percent last year, and by 25 per cent since 2004.
However, production in the new world countries including the US, Australia, Argentina, Chile, South Africa, New Zealand, has been increasing.
The report says the French are still the world’s largest consumers of wine (12 per cent).
But it adds that the US (also 12 per cent) is now only marginally second.