World wine output set to fall to 246.7 million hectoliters, the lowest since 1961: OIV

Global wine production this year is set to fall to its lowest level since 1961 after harsh weather in Western Europe, the world’s largest wine production area, damaged vineyards, the Paris-based International Organization of Vine and Wine (OIV) said on Tuesday.

Global output is expected to fall to 246.7 million hectoliters in 2017, down 8 percent from last year, the OIV said in its first estimates for this year.

The global decline reflects a plunge in output in the EU, where the world’s top three producers – Italy, France and Spain – are each projected to see a sharp drop.

The European Commission, the EU’s executive, estimates the bloc’s wine grape harvest will shrink to a 36-year low in 2017 as adverse weather, namely spring frosts and summer heat waves, takes its toll.

Reduced global production may erode a surplus over demand seen in recent years, when consumption was curbed by the effects of a world financial crisis in 2008.

The OIV said it was initially assuming a consumption range of 240.5 to 245.8 million hectoliters based on medium- and longer-term trends, but does not yet have firm demand data for 2017.

However, the impact of reduced production on actual market supply and prices depends on levels of stocks from previous years and the quality of wine in landmark regions.

In France, the world’s leading exporter by value, producers have pointed to the prospect of good quality wine.

The US, the world’s fourthlargest producer, was expecting to see output remain little changed at 23.3 million hectoliters, down 1 percent, the OIV said, while output in Australia was expected to rise 6 percent to 13.9 million hectoliters.