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Strong China demand continues to drive Aussie wine exports

Strong China demand continues to drive Aussie wine exports article image

Australian wine exports continue to grow strongly in both volume and value – driven mainly by strong demand from China.

Wine Australia’s Export Report released this week shows that in the 12 months ended September 30 export value grew 13 per cent to $2.44 billion and volume grew by 9 per cent to 799 million litres.

The average value of bottled exports increased by 1 per cent to $5.53 per litre and the average value of bulk exports increased by 3 percent to $1 per litre.

This resulted in a 4 per cent growth in the average value of all exports – $3.06 per litre free on board (FOB) – the highest value since the same period in 2009. 

“Established and new-to-market exporters are sharing in this strong export growth,” said Andreas Clark, CEO of Wine Australia.

“There were a record 2102 active exporters in the period, up from 1744 exporters in the same period in 2016. Of these, 1475 exporters experienced a growth in exports of 28 per cent ($451 million) to $2 billion.”

Red wine continues to dominate exports, contributing 74 per cent of export value. Red wine is also the standout growth category for table wine, growing by 16 per cent to $1.8 billion.

Record growth in Northeast Asia

Exports to all regions recorded growth, with the strongest growth driven by exports to Northeast Asia, which increased by $248 million (36 per cent) to a record $926 million.

Exports to:

  • Southeast Asia grew by $10 million (6 per cent) to $162 million
  • Europe grew by $8 million (1 per cent) to $578 million
  • North America grew by $7 million (1 per cent) to $646 million, and
  • Middle East grew by $1 million (6 per cent) to $21 million

In the period, Australia exported wine to 124 countries and the value of exports increased in 82.

Australia’s five largest markets account for 76 per cent of the value of Australian exports.

The top five markets by value were: 

  • Mainland China (30 per cent share of export value)
  • United States (19 per cent share)
  • United Kingdom (14 per cent share)
  • Canada (8 per cent share), and
  • Hong Kong (5 per cent share)

Exceptional growth to mainland China continued, with the value of exports up 56 per cent to a record $739 million. Growing consumer demand contributed to this strong growth, as have some changed business practices.

The reduced tariffs through the China-Australia Free Trade Agreement has seen exporters now shipping directly to mainland China instead of Hong Kong. Also, as logistics and route-to-market practices evolve, some products are being sent earlier to market.

The number of shipments that departed Australia in September 2017 was 7.6 per cent higher than in September 2016 and the average growth in the number of shipments for this calendar year is 7.8 per cent.

In September 2017, Wine Australia issued 500 more import certificates than in September 2016.

Australia’s top five markets by volume were:

  • United Kingdom (28 per cent share of export volume)
  • United States (23 per cent share)
  • Mainland China (17 per cent share)
  • Canada (8 per cent share), and 
  • Germany (5 per cent share)

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