Cape Town Water Shortage Crisis Is Threatening South African Wine Harvest

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South Africa’s wine industry is praying for rain.

The catastrophic water shortage that is gripping Cape Town is now threatening to hurt the output of the region’s vineyards, which make South Africa the world's seventh-largest producer of wine.

A lack of rainfall in the Winelands that dot the Western Cape of South Africa has entered its third season in a row, resulting in an undersupply of water for irrigation. The shortage is intensifying pressures on an industry that employs roughly 300,000 people and forms the backbone of the provincial economy. South Africa produces some of the world’s most popular wines but it struggles with profitability, on average, the local wine industry returns about 1% on investment,

Depending on the region, vines generally need between 250 and 600 millimeters (between 10 and 24 inches) of rain annually to survive. Though temperatures and precipitation vary by region, South Africa’s Winelands have, on the whole, received about half as much rain in the run-up to the annual harvest, which began in early January.

Dams that supply irrigation water to the vineyards stood, on average, 26% full in mid-January compared with about 42% full a year ago. The deficit triggers quotas that have cut the amount of water available at some vineyards by as much as 80%.

“We simply don’t have enough water to keep up with the irrigation requirements,” said Francois Viljoen, consultation service manager for VinPro, a nonprofit that represents South Africa’s wine industry. “The water stress is starting to show. The result is smaller berries, which affect your volumes. And you also have less juice in the berries.”

Vineyards sit beneath hills at a farm near Stellenbosch, in the country's wine producing region, South Africa
Vineyards sit beneath hills at a farm near Stellenbosch, in the country’s wine producing region (Reuters/Mike Hutchings)
The drought follows a season of damage to crops from frost and hail, which together with 7% fewer hectares tilled for wine grapes over the past decade looks to make this year’s harvest the smallest since 2005. Yields could fall between 16% and 20% from the estimated 1.4 million tons of grapes produced in 2017, based on projections.

Last year, South Africa’s vineyards produced an estimated 1.1 million liters of wine (including offshoots such as wine for brandy and grape juice) and generated revenues of nearly 22 billion rand in sales ($1.9 billion, excluding brandy) at home and abroad.

Thanks to the drought, the volume of wine sold this year could drop an estimated 9%, or about 90 million liters. And because vineyards require irrigation to regenerate for the next harvest, the 2019 crop may be threatened as well.

Smaller, more concentrated grapes can benefit a handful of producers of high-end wines. But the shrinkage threatens to cut the profitability of wine shipped in bulk, which accounts for about 60% of South Africa’s wine exports.

That is likely to leave producers with losses “left, right and center,” says Roland Peens, a director at Wine Cellar, a merchant and cellarer with offices in Cape Town and Johannesburg, who predicts that the squeeze will put some producers out of business. “We’ll only feel the impact in the next couple of years,” he adds.

The weather plaguing South Africa’s wine industry also is taking a toll on the vineyards of Europe, where hail, frost and drought have slashed grape harvests across Italy, France and Spain, which together produce nearly two-thirds of the wine sold worldwide.

The result, predicts Peens, will be higher prices for consumers and a shakeout among producers around the world. “There’s definitely a climatic shift happening,” he says. “The season of the vine depicts that very quickly.”

By Brian Browdie
January 25, 2018
Source: QZ.com