Agriculture

2 (a)     The South African wine exports in volume (litres) terms, (i) recorded 448.4 million litres in 2017, (ii) 420.2 million litres in 2018, (iii) reaching 319.8 million litres in 2019 , (iv) 2020 registering 318 million litres, (v) and 2021 amounting to 388 million litres, an average annual decline of 13% between 2017 and 2021. However, it is positive to see signs of recovery between 2020 and 2021.

(b) Towards 2027, based on the vine area, over 11 000 hectares are expected to be uprooted without replacement in South Africa, a decline of 12% from 2021 (BFAP, 2022). Grape production is expected to decline significantly in the next two production seasons. From 2021 to 2030, the vine harvest is expected to stabilize at an average of 1.3 million tons (excluding sultanas). The South African wine stock levels and production volumes are expected to decline between 2022 and 2031, whilst wine prices are projected to recover.

(c)   According to the wine industry, record stock levels reported in 2020 has since declined, but projections indicate that there will still be 520 million litres (including 80 million litres uncontracted) of wine at the end of 2022. The surplus was reduced via various mechanisms that included juice for grape concentrate, export of industrial wine, export of bulk and packaged wine, as well as domestic sales.  Whilst this is part of the recovery process, it should be noted this improved trade unfortunately has not lead to a profitability improvement yet, due to various challenges such as farm level cost inflation of 15% – 20% year on year, disruption at the Cape Town Port, Eskom load shedding that imply significant cost in terms of fuel for generators to pump water and cooling in wineries and tourism that has not recovered. The surplus stock was also sold at reduced prices which imply cashflow pressure.

(d)   The Department has had various market development interventions to increase exports from the Western Cape to establish, developing and grow markets especially in Europe, Asia and within the African market. Some of those include ethical trade support targeted to access and maintain traditional markets like Europe, export promotion activities to markets like China, Uganda, Ghana, Nigeria, Kenya and Angola. Some of these are in collaboration with the various partners within the wine industry. The focus of the market development interventions is to develop relationships with trade i.e. from importers, retailers, sommeliers, media and through to influencers, and including our own Africa social media communication. Even though strong emphasis is on exports, however, the Department also worked with the South African Wine Transformation Unit to assist with Black Owned brands growth in the domestic market through various interventions, e.g. establishment of a home for the brands and development of an e-commerce platform to improve sales.