Two lean years ahead for SA’s wine growers
Monday, 23 January, 2006
WineNews Editorial Team
This was the conclusion of agricultural economist, Gert van Wyk at a VinPro Information Day held in Goudini last week.
Van Wyk’s research into the profitability of wine grape farming found a 15.4% decrease in average Rand per hectare income from 2004 (R31 236) to 2005 (R26 424). This can in part be attributed to a drop in red wine prices, Van Wyk said, and noted that a PriceWaterhouseCoopers study of last year found Rand per hectare income to have been lower.
Van Wyk concluded that there are two ‘difficult’ years ahead for SA’s wine growers and suggested a long-term value chain management approach to the problems confronting wine grape farming.
Su Birch, CEO of Wines of South Africa (WOSA), opened her presentation saying that the SA wine industry should find itself in a more promising position two years from now when global supply and demand ought to be more balanced.
She warned that ‘survival is profit’ within the current circumstances and added that South Africa is ‘better placed’ than most because of its image abroad and the scope left for growth by its relatively small market share internationally.
Birch declared 2006 the year of South African wine in the United States, forecasting exports to double with at least 2m 9-L cases due to be shipped over the next 12 months. She cautioned exporters not to get greedy and asked that prices be kept constant in the face of intensifying competition on US shelves.