Business Environment Profiles - New Zealand
Published: 09 April 2024
Domestic price of wine grapes
102 Index
3.7 %
This report analyses the domestic price of wine grapes in New Zealand. The data is based on New Zealand dollar per tonne price of wine grapes, and is sourced from the New Zealand Winegrowers Annual Report. It is measured as an index, and is presented in financial years, with a designated base year of 2021-22.
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IBISWorld forecasts the domestic price of wine grapes to rise by 1.5% in 2024-25, to 101.7 index points. The decline in grape yield from the previous year is pushing grape prices higher. The re-opening of borders after the pandemic, coupled with increased international and tourist demand, is further driving up wine grape prices. The Free Trade Agreement between New Zealand and the United Kingdom, effective May 2023, removing export tariffs on commodities, including wine, has significantly boosted exports, contributing to the price rise.
The Wine Production industry has faced volatile conditions over the past five years. A major source of demand at the beginning of the period was from wine tourism. This trend supported higher prices as consumers increasingly purchased premium wines directly from producers. In addition, strong export demand has also supported prices, particularly as New Zealand wine has gained a stronger reputation in export markets. The United States is the largest export market by value, which is significant because, as a mature market, the main demand is for premium wine. COVID-19 restrictions impacted demand for wine in both the domestic and overseas markets for much of the period. However, these restrictions have since eased. Mixed weather conditions have affected prices significantly, such as when Cyclone Gabrielle hit New Zealand's North Island in February 2023. The cyclone reduced the volume of harvested and crushed grapes.
The depreciation of the New Zealand dollar has aided wine exports and supported wine grape prices over the past five years. As New Zealand wine products have become more affordable in international markets, the Grape Growing industry has been able to sustain higher prices over the most of the period. Overall, IBISWorld forecasts the domestic price of wine grapes to rise at a compound annual rate of 3.7% over the five years through 2024-25.
IBISWorld forecasts the domestic price of wine grapes to rise by 1.2% in 2025-26, to 102.9 index ...
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