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US wine exports hit by strong dollar in 2014

US wine exports dropped below the US$1.5bn mark last year from their record high in 2013, with shipments to many major markets affected by the strong dollar.

According to preliminary numbers quoted by California’s Wine Institute – the state accounts for 90% of US wine exports – the value of shipments last year fell by nearly 4% to just over $1.49bn, but volumes rose by 1.6% to 49.2m cases.

The news means a mixed week for those in Napa Valley, after optimism around the 2013 vintage propelled the annual Premiere Napa Valley auction to a record $6m in sales last weekend.

Alongside the dollar, exports were also impacted by a long-running labour dispute involving a number of West Coast ports, which particularly affected shipments to the Far East.

There were contrasting fortunes for the country’s two dominant export destinations: while shipments to the 28 European Union countries declined 16% by value and 8% by volume, Canada’s volumes leapt 29%, with value rising 7%.

The EU and Canada together account for more than two-thirds of US wine exports, but the three next-largest export destinations – Japan, China and Hong Kong – also registered declines.

However, emerging markets provided cause for optimism: Mexico, South Korea, Nigeria, Vietnam, Singapore, Taiwan, Dominican Republic, the UAE and Brazil all registered double-digit increases for both volume and value.

‘With three back-to-back California vintages (2012, 2013 and 2014) heralded for their high quality and size, we have the ability to meet consumer demand for our wines both in the US and abroad,’ said Wine Institute president and CEO Bobby Koch.

The Institute’s UK trade director, John McLaren, said past duty tax increases had ‘taken their toll’ on wine sales there, but added, ‘Premium wines priced at $15 and over have increased [sales] by 30% – premium California wine is well-set for further growth here.’

‘While California wine sales in Japan are brisk, supply from California has been a major challenge due to slow shipments from the state’s West Coast ports,’ reported Japan trade director Ken-ichi Hori.

‘Resolution of the port issue should bring supply back in line with growing demand.’

In China, the government’s ongoing austerity campaign impacted importer demand for US wine, although the Wine Institute insisted the long-term outlook was ‘very promising’.

The body also warned that eurozone markets were likely to remain ‘challenging’ in 2015, thanks to the stronger dollar and weaker euro.

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Written by Richard Woodard

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