Alert that inflation and the rise in costs due to the war in Ukraine cause a pronounced imbalance between supply and demand
MADRID, 29 Mar. (EUROPA PRESS) –
The Coordinator of Organizations of Farmers and Ranchers (COAG) has called on the Ministry of Agriculture, Fisheries and Food to “urgently” provide a package of aid to activate the distillation crisis in the wine sector, just as the Government has done French to mitigate the impact of the Ukrainian war on its sector and inflation, according to a statement.
Specifically, the agrarian organization has specified that there is currently a pronounced imbalance between supply and demand in the wine sector, which is motivated by inflation derived from the war in Ukraine, accompanied by a significant increase in the costs of inputs ( 55% compared to March 2021), as well as a reduction in both exports and consumption in the domestic market.
In addition, despite the drought that has affected the main producing areas of Spain, this season’s production has remained at similar levels to the previous one.
In this way and with respect to demand, the data available for the current 2022/2023 campaign show that production up to this point in the campaign is 35 million hectoliters, 1% more. However, the domestic market has fallen by 0.95 million hectoliters compared to last season, with bulk reds/rosés representing 59% of this reduction.
While there is a greater offer, since the final stocks, as of January 31, are 52 million hectoliters. The previous campaign, on July 31, 2022, ended with 34.6 million hectoliters. If the data of said stocks is compared with respect to the last six campaigns, it can be seen that, after a slight decrease in stocks following the intervention of the sector due to the pandemic, the stocks are in much higher figures than those found in the campaigns prior to the intervention.
These inventories, together with the strong drop in demand, are causing a paralysis of the market and a collapse in prices, very markedly in red wines.
“Within the sector as a whole, winegrowers are the party most affected by the economic consequences caused in this context, causing a notable loss of profitability and a very uncertain future, which is seen as unsustainable. For this reason, we have requested the Ministry adopt the measures required for the stabilization of the wine market in accordance with the Support Plan for the Spanish Wine Sector (Pasve)”, stressed the head of the COAG wine sector, Joaquín Vizcaíno.
Vizcaíno has stressed that it is “vital to act urgently” in the face of the situation that the sector is suffering, as France has done with the approval of the crisis distillation.
The French Ministry of Agriculture intends to allocate a budget of 80 million euros to aid for distillation, 40 million euros from own funds and 40 million euros from European funding (EAGF), with prior authorization from Brussels.
