The Californian wine industry is welcoming the abundant crop after two shorter ones as consumer demand continues to grow. According to international brokerage firm Ciatti, based in San Rafael California, the 2012 harvest “will provide supply to wineries and bring the overall market back into balance as we enter 2013”. The overall increase of 20 percent in fact hides some even more impressive increases with state-wide production of Pinot noir, for example, growing by 45 percent to 247,000 tons and rises of over 85 percent in Monterey and Sonoma county: “we experienced yields per ton on Pinot Noir in many areas that were not thought possible”, says Ciatti in its harvest commentary. Other varietals such as Cabernet saw their largest crops since the historical 2005 harvest. Demand for the varietal continues to be strong and Ciatti predicts that California will see more new planting over the next few years: “the 495,622 tons harvested was needed for growing case good sales”.

The response of the Californian wine industry to the supply-demand imbalance is a little worrying for exporters who have been reaping the benefits. Concern is heightened by the fact that plantings have been fairly limited until now and are predicted to rise. Obviously weather conditions have to oblige, but what happens when increased areas come on-stream and yields are high? Bulk wine imports have been steaming ahead in recent times due to the lack of availabilities in domestic production. Ciatti estimates that approximately 40 million equivalent cases were imported in bulk in 2012, partly on the back of grape price increases sparked by the US shortage. Although grape prices continued to rise upwards of 20 percent for the 2012 crop in many areas of California, eventually the larger crop and inventories should push the bulk wine market pricing down from the highs of last year, says Ciatti. This is good news for consumers who are likely to see greater availability of California wine in the market place and more stable prices for varietals like Pinot noir and Chardonnay, but it’s not so cheering for exporters of bulk wines who stand to lose out to domestic producers.