China: the only major export market where earnings increased for Australian wines in 2009

Wine grape prices will remain low and production will take a four per cent hit in the 2009-10 growing season, according to information released at the ABARE Outlook 2010 conference.

Production is expected to tip the scales at just 1.6 million tonnes as a heatwave across the south east continues to exert its dominance over the industry, particularly affecting the production of cabernet sauvignon, merlot and chardonnay types.

The good news, however, is that prices are expected to recover slightly in 2014-15 to around $547 a tonne, but this is still about 24pc lower than the average price between 2004 and 2009.

Export demand for Australian wine is expected to be weak in the short term after a volume increase of 6pc in 2008-09 to 750 million litres.

Wine is returning less per litre as demand shifts into the lower price brackets for bulk shipments.

In value terms, exports lost 9pc in 2008-09 to $2.43 billion, and earnings are expected to decline to $2.39b in 2009-10.

The only major export market where earnings increased was China.