Argentina exports up by over 40%

Argentinian wine exports are up by over 40% in the first two months of this year – while a drop in domestic consumption is causing concern.

Statistics from the government's National Wine Institute show that in the first two months of 2008 wine exports rose 40% over last year in value and 27% in volume. In February alone, exports grew 52% in dollar value.

Exequiel Barros of the Mendoza consulting firm Caucasia Wine Thinking told decanter.com that export trends indicate Argentina will likely boost wine exports from US$470m in 2007 to as much as US$850m by 2010.

'Argentina has a lot of margin for growth if you look at its production capacity. The price of the wines is going up: this year the price is about 8% higher than in 2007,' said Barros.

At the same time, a substantial fall in wine shipments within Argentina in March – down 30% from last year – coupled with rising production costs and inflation, has some Argentine wine producers worried about short-term prospects.

The sharp drop in shipments was due in large measure to a farmer strike that led to road blockades.

But with about 80% of production in the world's fifth-largest wine producer destined for domestic consumption, some winemakers are concerned. The average amount of wine consumed per capita by Argentinians 18 years or older has fallen 38.8% over the last five years.

In addition, rising inflation is contributing to a steep hike in labor and agri-chemical expenses this year. And because of hail and excessive rains, officials said the recently concluded 2008 wine harvest is down 10% in volume.