Grape production to drop in 08/09

Submitted 2/04/2009

AAP

Lack of irrigation water, high temperatures and Victoria's bushfires are expected to contribute to a 13 per cent drop in Australian wine grape production, the nation's commodity forecaster says.

But there's hope a 1.6 million tonne shortfall in 2008-2009 could be offset by increased production next year.

The shortage is unlikely to impact on wine grape prices because stocks were likely to outstrip sales growth, impacted by the economic slowdown, the Australian Bureau of Agriculture Resource Economics said.

Growers, especially those in south-eastern Australia, faced shortages of water for irrigation throughout the growing season.

They were also hit by a heatwave in late January and early February which further reduced yields, ABARE acting executive director Terry Sheales said.

The Victorian bushfires also reduced yields in many areas, with grapes either smoke damaged or completely destroyed.

If water availability for irrigation improves next year, production would increase by 1.8 million tonnes, ABARE predicts.

The tough economic climate and strong competition in export markets overseas meant the increasing stocks-to-sales ratio is expected to maintain downward pressure on wine grape prices in the next few years, Dr Sheales said.