In mid-December, Argentina's new** official exchange rate was 800 pesos per dollar, a depreciation of more than 50% and the highest level in the last 30 years.
As the world's fifth-largest wine exporter, how are Argentina's wineries coping? How do Argentine wine importers in China react to this?
The peso depreciated sharply against the US dollar, and Argentine wine ushered in a big test?
The announcement of the depreciation of the peso coincided with the introduction of new import and export regulations in Argentina. It adjusted the exchange rate settlement of agricultural exports from 50:50 to 80:20. It is understood that the official rate rose to 800 pesos, and the free rate remained at 1 dollar: 1070 pesos. The exporter converts 80 per cent at the official exchange rate and the remaining 20 per cent at the free exchange rate, resulting in an implied exchange rate of about 860 pesos.
According to the calculations of Argentine agriculturalists, the profits of their agricultural exports will shrink, taking into account freight and raw materials*** as well as inflation.
What will be the impact of wine, which is an important part of Argentina's agricultural exports, on Argentina's current economic policies?
The spot market has had a greater impact, and some wineries have stopped exporting
Wang Xiaofeng (pseudonym), an Argentine wine importer from Fujian, told the WBO: "Some Argentine wine brands and wineries have stopped exporting now, saying that they will not be notified until New Year's Day." ”
It is true that some Argentine wineries have stopped supplying, but brands such as Catena have not informed about this. An Argentine wine importer, Chen Ming (not her real name), told the WBO.
Why are some Argentine wineries stopping exports? Some industry insiders believe that spot trading has an impact on the profits of Argentine wineries.
Song Ji, general manager of Wanguo Wine Union International Wine Co., Ltd., said that the depreciation of the peso will be more beneficial to Argentine wine exports to China in the short term, because the dollars paid to Argentina are more valuable. In addition, the cost of all aspects in Argentina has not risen very much, and some wineries may decline slightly in the short term.
Another Argentine wine importer, Li Ming (pseudonym), also analyzed that the peso suddenly depreciated too much, and the price of all aspects of domestic costs in Argentina has not risen so fast, so there will be an exchange rate difference or a time difference of 2-3 months during this period. Within this time gap, if the Argentine winery continues to supply, it may lose money.
Beneficial for wineries and wineries that have already booked**
However, there are also wineries that have not stopped exporting. "Our products are not being supplied at the moment. Huang Shuang (pseudonym), an Argentine wine importer from Zhejiang, said, "But our current stocking has been completed, and the inventory is sufficient, and we do not plan to purchase it again this year. ”
According to the analysis of industry insiders, for **, the depreciation of the peso in the dollar is more valuable, and the Argentine winery will get more pesos in US dollars. At the same time, it is also more conducive to the export of Argentine wines**.
Ye Ping (pseudonym), an Argentine wine importer in Guangdong, said frankly: "In fact, this exchange rate change will be more beneficial to the big Argentine wineries, and we signed contracts with the big wineries for five years. ”
How do Chinese importers deal with it?
As for the impact of bulk wine and bottled wine, Song Ji admitted: "In fact, with such a big depreciation of the peso, there is no difference between the impact of bulk wine and bottled wine. It's just that the cost of labor and packaging for bottled wine is higher, and it may take more time to adjust the exchange rate of other costs. ”
However, he also said that in the long run, Argentine wine will see another increase in prices.
In April this year, Argentina introduced a special exchange rate for wine exports "wine dollars", which is expected to be exported at a lower than normal rate, and many wineries are also increasing prices.
Song Ji revealed to the WBO: "As far as I know, the exclusive exchange rate of 'wine dollars' is actually not enjoyed by many importers, including our company. Because even if this policy is introduced, sometimes the winery may not necessarily adopt it, judging from the current big move in Argentina, all the previous policies may change, and this wine-specific policy may be canceled. ”
Ms. Yan, an Argentine wine importer, said: "I have entered 7 cabinets of Argentine wine this year, and I originally planned to enter 7 cabinets next year, but if I continue to do so next year, I will definitely adjust my purchasing plan." ”
Argentine wines have a relatively low market share in China, and the market is not well-known, so if the price continues to increase next year, we should reduce purchases. Chen Ming said.
According to the data of the General Administration of Customs, from January to October 2023, Argentina's wine imports fell by 65% year-on-year47%, and the import value decreased by 17 percent year-on-year24%, and the average price was **139 year-on-year7%。Among them, the import volume of bottled wine decreased by 36% year-on-year8%, and the import value decreased by 11 year-on-year4%, the price increased by 40% year-on-year. Argentine bulk wine fell directly out of the top 10 of the top 10 imports.
It can be seen that the main reason for the sharp decline in Argentine wine imports this year is the excessive increase in wine ** caused by domestic inflation and costs.