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Wine shows signs of recovery - Rabobank
05.08.2010 11:35 "Agro Perspectiva" (Kyiv) —
The wine industry is showing signs of recovery but high-end wine sales are still struggling in 2010, according to Rabobanks latest wine report.
Compared to the dismal first quarter of 2009, nearly all major global suppliers are reporting improved export trends for the first quarter 2010 thanks to an upturn in the global economy. However, Rabobanks food & agribusiness research and advisory executive director Stephen Rannekleiv, said: «While 2010 will almost certainly prove to be a much better year than 2009 for global wine trade, pricing for super-premium wines has yet to fully recover».
Oversupply is set to remain a key factor determining success in the global wine sector. According to the International Organization of Wine and Vine (OIV), wine production exceeded wine consumption by approximately 9% in 2007 and 2008, and with the recession, consumption was believed to have declined twice as fast as production, further widening the gap.
«The excess supply constantly available in the market has made it difficult to build solid brands with strong pricing power, creating headwinds for profitability in the sector,» added Rannekleiv.
According to Rabobank projections, the euro is likely to remain relatively weak for most of the upcoming year, with some mild improvements starting in 2011. This could drive European wine imports into the United States and may also improve European exporters competitive position against Australia and Chile in the price-sensitive emerging markets.
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