World wine production and trade update.

The latest statistical survey by the United Nations Food and Agricultural Organization (FAO) reveals that total wine production and trade showed little change in 2002. Production, at 7.1 billion gallons, was down 2%. Exports, at 1.75 billion gallons, were up 2%.

Because of continuing

FAO's troubles--and the cutbacks in publishing and personnel, among other activities--began in the early 1990s, when the United States Congress failed to appropriate money for United Nations dues. In the mid-1990s, the U.S. arrears were finally paid up, but the damage had been done. Other member countries had refused to increase their dues to make up for the U.S. shortfall, and therefore, the contribution levels had gotten out of date.

The 1995-96 two-year FAO budget was set at $650 million. It remained at that level until 2002-2003, when it was increased to $750 million. But this increase was insufficient for two major reasons: 1) inflation in FAO's operating costs had outstripped the dues increase, and 2) the dollar had depreciated 20+% against the euro. FAO's budget is calculated in dollars, while most of its expenses are in euros. The European countries pay in euros or other national currencies figured in dollar amounts. The dollar depreciation had therefore worsened the already severe budget shortfall--currently $60 million--causing still more shrinkage in staff and services.

Table 1 lists the major wine producers. Weather problems in part of France and most of Italy kept crops below average. Spain recovered from its disastrous 2001 level. The U.S., as Wines & Vines readers know, had a near-record crop. Australia continued its year-to-year increase in planted acreage and production.

Among the larger countries, there were two puzzling developments. Newly reported statistics for Russia indicate that it is a major producer. Despite uncertainty regarding the figures' reliability, Russia is included in Table 1. China reported producing 285 million gallons of wine, but most of this was probably rice wine (sake). The fact that the Chinese production figures were exactly the same for three consecutive years (were there no weather or acreage variations?) is a reason for skepticism. China has very little foreign trade in wine. The imports go mainly to hotels and restaurants serving foreign travelers, and per capita consumption is very low. So, for these reasons, China is not listed as a major producer.