The drought has failed to put a damper on South Africa’s wine industry as export figures rose 4 percent to R9.06 billion in 2018. Photo: Reuters

JOHANNESBURG – The drought has failed to put a damper on South Africa’s wine industry as export figures rose 4 percent to R9.06 billion in 2018.

The industry’s Wines of South Africa (WoSA) group said yesterday that the value of packaged wine increased 3 percent during the period, while bulk wine surged 7 percent.

However, spokesperson Maryna Calow said in the international markets the volume of local wines sold eased 6 percent, decreasing to 420.2 million litres during the period.

Calow said the only growth was registered in Sweden at 10 percent, China with 7 percent and the Netherlands at 1 percent. She said the US market remained flat.

“The UK remains South Africa’s top export market, realising a total value of R1.844 million worth of exports, while Germany held its second place, at R1.329m of wine bought, and once again the Netherlands in 3rd position at R693m,” said Calow.

In the African markets, Kenya, Tanzania and Zambia’s total exports surged 73 percent, 35 percent and 33 percent, respectively.

WoSA chief executive Siobhan Thompson said while 2018 proved to be a challenging year for the industry, the sector managed to put its best foot forward.

“We have proven that we are indeed producers of world-class, high-quality wines and deserve to have this reflected in our bottom line,” said Thompson.

Wandile Sihlobo, agricultural economist and head of agribusiness research at the Agricultural Business Chamber, said the weaker rand against the US dollar and a general upswing in global wine prices were key factors behind the increase in value of wine exports in 2018.

“Globally the prices had increased due to lower production in major European wine-producing countries, such as France, which were affected by drought,” Sihlobo said

Meanwhile, SA Wine Industry Information and Systems has said the regional drought was to blame for the 1.2 million tons of wine grape harvest achieved in 2018, although this year’s harvest was expected to be slightly larger than last year’s.

Francois Viljoen, consultation services manager at industry body Vinpro, said the 2017/18 season changed their frame of reference about water resources and way of thinking about water in general.

“We had to come up with new ways to accumulate and save water and use this scarce resource more efficiently,” he said. 

“In some cases, vineyards had to be managed with 50 percent less water than usual and in some extreme cases with only 16 percent of the normal water allocation.”

In 2016, six southern African nations, including South Africa, and the EU signed an economic partnership agreement after 12 years of negotiations. The deal was aimed at gaining greater access for South African ethanol and some canned fruits and protecting the trademarks of rooibos, honeybush, Karoo lamb and local wines.

BUSINESS REPORT