June 16, 2020
Although wine exports resumed following the easing of the strict Level 5 lockdown regulations to curb the spread of the coronavirus disease (COVID-19) pandemic, wine exports continued to decline in May.
This was according to recent figures released by the South African Wine Industry Information and Systems (SAWIS).
The data indicated that the volume of wine exported in May dropped 8,4% to 29,2 million litres compared with May last year.
In April, when the total alcohol ban on exports and local sales was in place, wine exports fell 73%, resulting in only 7,7 million litres of wine being exported in April.
According to Maryna Calow, communications manager of Wines of South Africa (WOSA), the wine industry was currently facing major challenges. She explained that there were many logistical processes involved in the exporting of wine.
“These processes take time and producers were unable to make arrangements in advance as they did not know when they would export their wine again.”
She pointed out that there were also many challenges being experienced at the Cape Town harbour. “The port is currently only operating at 50% of capacity. I am aware of producers whose wine has been sitting in the harbour waiting to be loaded for over a month.”
Calow added that the recent cold front, which brought stormy weather to the Western Cape, had also played a role, as many ships could not enter and simply passed by the harbour.
SAWIS’s figures also showed that bulk wine exports increased 7% to 19,7 million liters in May, while packaged wine exports dropped nearly 30% to 9,5 million liters. Calow said WOSA expected more bulk wine to be exported in the coming months.
“Due to the current constraints at the Cape Town harbour and ships just passing by, many dry goods, such as bottles and corks that producers ordered from overseas, do not get delivered on time. Producers cannot wait until they eventually get these goods and therefore export in bulk.”
She also pointed out that there could be a glut of wine in Europe as wine sales in many of the major wine producing countries plummeted during the lockdown periods there.
Calow foresaw that producers in these countries would drop their prices, which would further add to the woes of the South African wine sector.
Although the picture for the wine industry didn’t look rosy, Calow said that it seemed as if fewer cellars than expected would have to shut down their operations.
Earlier this year, Vinpro indicated that about 80 wineries and 350 producers could be forced out of business.
She attributed this to the strong demand for online wine sales during the Level 4 lockdown.
According to Calow, producers have done a good job of promoting online sales and this had boosted many producers’ cash flow.
Source: farmer’s weekly