Turning water into wine a future challenge
By Caleb Cluff
Tuesday, 04/03/2008
While wine grape prices are expected to increase and total sales of Australian wine are predicted to grow, future drought conditions and a lack of available water will be the major challenge facing the industry in the period to 2013. Managing and supplying water security will not only be the job of producers but also governments, and removing restrictions on water trade may provide benefits, according to ABARE
Wine grape production should begin to recover by about 15 per cent to 1.6 million tonnes in 2007-08, short of the 1.9 million tonnes of 04-05. Red wine grapes should dominate over white as cool climate regions experience a return to favourable conditions, and wine stocks should return to 2005-06 levels by 2010-11.
Exports of Australian wine should achieve a record value of $3.12 billion in 2007-08, but volumes of exports will be reduced to 784 million litres because of a lack of domestic supply. The UK will remain the top market for Australian wines, with the US second at 27 per cent of volume and 32 per cent of total value. Higher prices will be subject to changes in market dynamics within Australia, subject to Australian Competition and Consumer Commission rulings on growers forming negotiating groups.
Australian wine exports are likely to face competition from 'new world' producers such as Chile, and an increased area of planting in China may lead to growth in that country's production in the future.
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