Best of the Week
Most Popular
1.What Happened to the Stock Market Crash Experts Were Predicting - Sol_Palha
2.London Housing Market Property Bubble Vulnerable To Crash - GoldCore
3.The Plan to Control ALL Your Money is Now at Advanced Stage
4.Why Gold Is Set For An Epic Rally This Spring - James Burgess
5.MR ROBOT NHS Cyber Attack Hack - Why Israel, NSA, CIA and GCHQ are Culpable - Nadeem_Walayat
6.Emmanuel Macron and Banking Elite Win French Presidential Election 2017 - Nadeem_Walayat
7.Trend Lines Met, Technical's are Set - US Dollar is Ready to Rally (Elliott Wave Analysis) - Enda_Glynn
8.The Student Debt Servitude Sham - Gordon_T_Long
9.Czar Trump Fires Comey, Terminates Deep State FBI, CIA Director Next? - Nadeem_Walayat
10.UK Local Elections 2017 - Labour Blood Bath, UKIP Death, Tory June 8th Landslide - Nadeem_Walayat
Last 7 days
UK Local Election Results Forecast for General Election 2017 - 26th May 17
Stock Market & Crude Oil Forecast! - 26th May 17
Opinion Pollsters UK General Election Seats Forecasts 2017 - 26th May 17
Bitcoin and AltCoins Crypto Price Correction - 26th May 17
Bearish Head and Shoulders in EURUSD? - 26th May 17
SELL US Stocks - Massive Market CRASH WARNING! - 26th May 17
EURGBP: A Picture of Elliott Wave Precision - 26th May 17
Credit Downgrades May Prompt Stock Market Capital Shift - 26th May 17
Rosenstein and Mueller: the Regime Change Tag-Team - 25th May 17
Stock Market Top - Are We There Yet? - 25th May 17
Should I Invest My Fortune in Gold? Inaugural Lecture by Dr Brian Lucey - 25th May 17
USD/CAD Continues Decline - 25th May 17
Bitcoin Price Goes Loco! Surges through $2,500 Despite Unclear Fork Issues - 25th May 17
The US-Saudi Arms Deal - Sordid Saudi Signals - 25th May 17
The No.1 Commodity Play In The World Today - 24th May 17
Marks and Spencer Profits Collapse, Latest Retailer Hit by Brexit Inflation Tsunami 2017 - 24th May 17
Why Online Trading Platforms Are Useful for Everyone - 24th May 17
The Stock Market Will Tank Hard - 24th May 17
It’s Better to Buy Gold & Silver When It DOESN’T Feel Good - 24th May 17
Global Warming - Saving Us From Us - 24th May 17
Stock Market Forecast for Next 3 Months - Video - 23rd May 17
Shale Oil & Gas Production Costs Spiral Higher As Monstrous Decline Rates Eat Into Cash Flows - 23rd May 17
The Only Metal Trump Wants More Than Gold - 23rd May 17
America's Southern Heritage is a Threat to the Deep State - 23rd May 17
Manchester Bombing - ISIS Islamic Terrorist Attack Attempt to Influence BrExit Election - 23rd May 17
What an America First Trade Policy Could Mean for the US Dollar - 22nd May 17
Gold and Sillver Markets - Silver Price Sharp Selloff - 22nd May - 22nd May 17
Stock Market Volatile C-Wave - 22nd May 17
Stock Market Trend Forecast and Fear Trading - 22nd May 17
US Dollar Cycle : Deep Dive - 21st May 17
Bitcoin Breaks the $2,000 Mark as Cryptocurrencies Continue to Explode Higher - 21st May 17
Stocks, Commodities and Gold Multi-Market Status - 21st May 17
Stock Market Day Trading Strategies and Brief 20th May 2017 - 21st May 17
DOW Needs to Rally Big or Correction is Next - 20th May 17
EURUSD reaches DO or DIE moment! - 20th May 17
How to Get FREE Walkers Crisps Multi-packs! £5 to £28k Pay Packet Promo - 20th May 17
UK BrExit General Election 2017 - Will Opinion Pollsters Finally Get it Right? - 19th May 17
Gold Mining Junior Stocks GDXJ 2017 Fundamentals - 19th May 17
If China Can Fund Infrastructure With Its Own Credit, So Can We - 19th May 17
Evidence That Stocks are More Overvalued than Ever - 19th May 17
Obamacare May Become Zombiecare In 2018 - 19th May 17
The End of Reflation? Implications for Gold - 19th May 17
Gold and Silver Trading Alert: New Important Technical Development - 19th May 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

China Turning Up The Heat On Bordeaux Futures

Stock-Markets / Investing 2010 Sep 16, 2010 - 03:56 AM GMT

By: Static_Chaos

Stock-Markets

Booming demand from emerging economies--especially China-- in addition to near-perfect weather in western France, is sending prices of Bordeaux soaring 28% within a one-month time.

WSJ reported that Château Lafite Rothschild's 2009 Bordeaux began its advance sales in early July at $18,000 a case. They were sold out in four days and the same case now is going for $23,000 (see graph from WSJ).


WSJ indicated some Hong Kong investors, betting on China’s wine thirst, are speculating in wine futures thus driving up huge price increases. Here is the tip bit from WSJ on the Bordeaux futures:
"Bordeaux's top 200 or 300 wineries use a system called sale en primeur, or presale, for part of their product. Early each summer, they exchange futures contracts with middlemen known as negotiants, who then sell the wine contracts to collectors, investors and fine-wine retailers."

That means, for the elite 5% of Bordeaux wineries, futures contracts are exchanged while a vintage is still in barrels. So, this 2009 Bordeaux won't be bottled until next year, at the earliest. And prices are expected to climb even further, 440% in one example cited by WSJ, after a wine is bottled.

WSJ quoted Council of Bordeaux Wine that volume of Bordeaux exported to China had grown 39 fold from 2000 to 2009, and was up 97% and 40% year over year, by volume and value respectively, in 2009 alone. Last year, China also passed the U.S. to become Bordeaux's biggest export market by volume outside Europe, and is considered the most important market, even before France, by some wineries.

According to the International Organization of Vine and Wine (OIV), China’s wine producing capacity is also growing alongside its love for spirits, China now is the world's sixth biggest wine producer, edging out Australia. Its potential is drawing elite vintners like Spain's Torres and France's Lafite.

In China, wine has become a status symbol of the hip urban lifestyle. Newly affluent and brand-conscious Chinese consumers flock to Bordeaux as red wine is associated with good health, and the color red traditionally signifies luck and fortune in Chinese culture.

Another factor of Bordeaux’s popularity--the combination of the massive population and finite food sources (food-for-wine) has prompted Chinese government to announce a policy of reducing the production of rice-based alcohol, a long-standing tradition in China.

Feeling tempted to dabble in wine investment? Bacchus Partners, LLC is the first and only wine investment fund in the U.S. However, wine may seem like an attractive investment at times, as an asset class, it remains speculative, complicated and not as well-developed as an investment option.  So, it is most likely best for someone with a sizable net worth looking for diversity into the exotics. Average investors probably should put money into other more conventional investments, or you might find yourself drinking down losing investment more often than not.

By Static Chaos

http://static-chaos.blogspot.com

© 2010 Copyright Statoc Chaos- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife