China dampens overall export value, while exports to the rest of the world increase

In the 12 months ended March 2021, exports decreased by 4 per cent in value to $2.77 billion and by 1 per cent in volume to 724 million litres (80 million 9-litre case equivalents). The average price per litre for all wine declined 3 per cent to $3.82 free on board (FOB). 

The decline in value mirrors the decline in volume. Figure 1 illustrates the sharp increase in exports from September to November 2020, driven by exports to mainland China and the United Kingdom. The decline in exports since that time is due principally to a reduction in exports to mainland China immediately after tariffs were imposed on Australian wine on 28 November 2020^[1], as well as the cumulative effects of three consecutive lower vintages in Australia leading to less volume available to export.

Figure 1: Value and volume of Australian exports 2020–21

Figure 2 compares the tonnes of the Australian winegrape crush to the volume of wine exports. It clearly illustrates the relationship between lower crushes and the subsequent decline in export volumes.

Figure 2: Australian winegrape crush and export volume over time

The decline in the overall average value is due to a drop in the share of bottled exports in the export mix, from 46 per cent share of volume in the 12 months ended March 2020 to 41 per cent in the same period in 2021.

Figure 3 illustrates the steady growth in the average price per litre of both glass bottle and unpackaged over the past five years. The drop in the bottled average price in the past five months has been due to the decline in exports to mainland China where exports have been heavily weighted to wines priced at $10 or more per litre. This has seen the overall bottled average value decline since December, although it is still higher than it was 12 months ago.

Figure 3: Average price per litre of glass bottle and unpackaged exports over time (A$ per litre FOB)

Destinations

In the 12 months ended March 2021, Australian exporters shipped wine to 111 destinations (down from 119 destinations in the same period in 2020).

The most significant growth came in exports to Europe, up 23 per cent to $710 million, the highest value in a decade. There was also growth to North America, up 5 per cent to $628 million, and Oceania, up 7 per cent to $112 million. The growth to these destinations was offset by a decline to Northeast Asia, down 16 per cent to $1.1 billion, as well as to Southeast Asia, down 15 per cent to $172 million, and the Middle East, down 61 per cent to $12 million.

Figure 4: Change in value of exports by region (A$ million FOB)

The top five markets by value are:

• Mainland China, down 24 per cent to $869 million
• United Kingdom (UK), up 33 per cent to $461 million
• United States of America (USA), up 4 per cent to $432 million
• Canada, up 9 per cent to $195 million, and
• Hong Kong, up 55 per cent to $148 million.

The top five destinations by volume were:

• UK, up 21 per cent to 264 million litres
• USA, down 1 per cent to 135 million litres
• Mainland China, down 40 per cent to 78 million litres
• Canada, up 4 per cent to 54 million litres, and
• Germany, up 22 per cent to 36 million litres.

Excluding mainland China, exports increased by 10 per cent in value to $1.9 billion and 8 per cent in volume to 646 million litres (71.8 million cases). Figure 5 illustrates while volume has stabilized, value is on a consistent upward trend.

Figure 5: Value and volume of Australian exports (excluding mainland China) 2020–21