Monday, January 17, 2022

How much does wine contribute to total exports?

Economically, national Gross Domestic Product (GDP) = consumer spending + government spending + investment + net trade. This economic concept has been of especial interest over the past couple of years, because the Covid-19 pandemic has notably reduced the GDP of most countries. Of interest in this blog post is the bit about Net trade, which is the sum of exports minus imports. How much do wine exports contribute to the national exports, and thus to GDP?

Note that here we are talking about goods or commodity exports — nations often export services, as well, that can generate national income. Also, wine exports are not necessarily related to national wine production, since re-export is a big business for some locations.


The data used to visualize exports come from the UN Comtrade: International Trade Statistics database, via the AAWE (Leading wine exporting countries: value and share of wine exports in 2020). In the graph below, the value of national wine exports in 2020 is shown horizontally, in million United States dollars (note the logarithmic scale), with the percentage contribution of those wine exports to total national exports shown vertically — each point represents one wine-exporting country.

As can be seen, for the vast majority of the countries wine contributes <0.5% of the total national commodity exports, as most people might expect. However, there are 17 countries labeled in the graph, some of which exceed this level considerably. The USA is also labeled, for reference.

Wine as a part of national goods exports

France (FR), Italy (IT) and Spain (ES) have long been the biggest wine exporters, both in terms of dollars (as shown here) and in terms of volume (in which case Spain is no. 1). Needless to say, wine is therefore an important component of national export dollars, although it it still in the region of only 1—2%. Australia (AU), the fourth biggest value exporter, is in the same financial boat.

However, the USA (US) and Germany (which is the point to its immediate left in the graph) are both relatively large wine exporters, but wine makes only a minor contribution to the total export value (<0.1%). Industrial exports contribute heavily, of course, to these big-time manufacturing nations.

South Africa (ZA), Latvia (LV), Lithuania (LT) and North Macedonia (MK) export progressively less wine, but wine still makes the same sort of contribution to national dollars as it does for Spain and Australia.

Portugal (PT) and Argentina (AT) are in the same export-value league as Australia and South Africa, but their wine exports are considerably more important nationally, about the same percentage level as for Italy. However, note that wine's share of Italy's total commodity exports has been growing, as shown by the AAWE (Wine's share of Italy's national commodity exports, 1994–2020), at least partly because Italy's overall exports have not changed for the past decade but Prosecco exports have boomed.

Chile (CL), and especially New Zealand (NZ), leave the other major exporting nations behind, as their wine contributes greatly to national export dollars (2.5% and 3.5%, respectively), even more than for France (2%). It is not surprising, then, that these two countries are major promoters of their vinous products, internationally — it is a good return on investment.

Among the smaller exporters, notably Togo (TG), Montenegro (ME) and China Macao (MO) also have wine contributing a largish amount to their export dollars. Obviously, in the latter case it is re-exports of imported wine, rather than local production.


This leaves us with Moldova (MD) and, especially, Georgia (GE), just across the Black Sea from each other, as the nations who benefit most from wine exports (5.5% and 6.5%, respectively). Neither country is a big exporter, but neither country is a particularly big exporter of anything else, either.

According to the Observatory of Economic Complexity (OEC), in 2019 Moldova was the number 138 economy in the world in terms of GDP. It's top exports were (in order) insulated wire, sunflower seeds, wine, corn, and seats; and the biggest customers were Romania, Russia, Italy, Germany, and Turkey. For wine itself, the biggest export markets were Belarus, Georgia(!), Russia, the UK, and Czechia.

Georgia is usually considered to be the cradle of wine-making, all of 8,000 years ago; and it is apparently still going strong. According to the OEC, in 2019 Georgia was the number 116 economy in the world in terms of GDP. It's top exports were (in order) copper ore, cars, ferroalloys, wine, and packaged medicaments; and the biggest customers were Russia, Azerbaijan, Armenia, Bulgaria, and China. For wine itself, the biggest export markets were China, Poland, and Belarus, but many other markets are increasing, including the USA, the UK, Germany, and Moldova(!). Mike Veseth has some recent coverage of Georgia's wine export scene (Anatomy of Georgia's wine export surge).

No comments:

Post a Comment