Republic of Moldova: Selected Issues
Author: International Monetary Fund
Publication Date:
25 Apr 2008
eISBN:
9781451825145
Language:
English
Keywords:
ISCR; CR; CIT rate; rate; wine; wage; wine production; Moldovan wine; production technique; wine industry; wine sector; Export performance; Trade balance
Download PDF (308.6 KB)

The first section of this paper is an attempt to examine the interest rate channel of monetary policy transmission in Moldova and to estimate the strength and the speed of the interest rate pass-through. The next section provides a background on Moldovan financial markets, liquidity conditions, and the current framework of monetary policy. The following section sets out the formal model used to estimate the strength and the speed of the pass-through, and the last session discusses results.

Abstract

The first section of this paper is an attempt to examine the interest rate channel of monetary policy transmission in Moldova and to estimate the strength and the speed of the interest rate pass-through. The next section provides a background on Moldovan financial markets, liquidity conditions, and the current framework of monetary policy. The following section sets out the formal model used to estimate the strength and the speed of the pass-through, and the last session discusses results.

IV. Globalization and Moldova’s Wine Industry52

106. Wine has traditionally been an important export for Moldova. The temperate climate is ideal for grapes, and as much as 10 percent of the arable land has been planted with vineyards over the years. During Soviet times, Moldovan wine was widely consumed throughout the USSR, with a strong brand identity. After independence, however, exports to other destinations have not grown substantially.

107. This paper examines the experiences of wine-exporting countries and contrasts them with prospects for Moldovan wine exports. After a brief review of global trade in wine over the past few decades, three groups of countries are contrasted. The first group includes four new big exporters: Argentina, Australia, Chile, and New Zealand. These countries have very quickly expanded both production and exports, with sustained growth rates of roughly 30 percent for over fifteen years, while improving quality at the same time. The second group includes Eastern European countries: Bulgaria, Hungary, Moldova, and Romania. Growth has been stagnant, or negative in this group, due to the challenges of restructuring industries after the end of collective agriculture. The third group offers a cautionary tale, and includes Northern African countries: Algeria, Morocco, and Tunisia.

108. Wine production and exports would benefit from reforms to improve the business environment. Wine shares many characteristics of manufactured goods, and productivity in the sector is dependent on investments, not just agricultural factors. The four big new exporters expanded export destinations, increased volumes, and raised quality simultaneously, implying a high level of innovation within their industries. Access to foreign direct investment and the corresponding technology transfer could quickly allow the sector to be more competitive.

109. In March 2006, Russia imposed a ban on imports of Moldovan wine. As wine exports were more than 10 percent of GDP, and 80 percent of all wine went to Russia, this was a severe balance of payments shock. Wine exports to Russia have resumed as of October 2007, but recovery is likely to be gradual. The original dispute was over the sanitary certification of wine, and administrative procedures by the Russian authorities are now more stringent.

A. Global Wine Production and Exports

110. Both wine production techniques and export patterns have changed significantly over the last thirty years. Advances in technology allow for more control over the production process, and thus over the finished product. This has allowed the quality and consistency of even cheap wine to be improved, making competition more difficult, but also expanding the market. The new techniques have been adopted with great success by several countries, with large increases in exports.

Wine Production

111. There is a taste for variety by wine consumers. Although it is an agricultural product, it is perhaps more appropriate to compare it with manufactured goods. Some measures of quality are available and widely accepted, such as reviews by recognized wine critics,53 but there are strong branding components. The taste for variety appears to have driven much of the growth in world wine trade over the past twenty years.

112. One of the most important determinants of wine quality is grape quality, implying high labor costs. Although some industrial countries (such as Australia) are moving to mechanical picking of grapes, higher quality vineyards rely on hand-picking.54 This can greatly increase the labor cost, which can be a significant fraction of operating costs.55 As Moldova has generally low labor costs and a large number of workers with experience in picking grapes (many families maintain vineyards for personal use), this could be a significant competitive advantage. While this could imply that large-scale, integrated vineyards and wineries are needed, some countries, notably Germany, still rely on cooperatives to produce grapes (Hanf and Schweikert, 2007).

113. However, technological advances in winemaking also necessitate capital investments. Modern winemaking techniques rely heavily on laboratory testing to assess the characteristics and of pressed grapes, and make decisions about blending batches for consistency. This also requires a controlled fermentation environment, and the associated equipment. Although Moldova has the lowest wages (using manufacturing wages as a proxy for wages in general), this is not enough—the World Bank cost of doing business indicators rank it almost as poorly as Argentina, and well below other Eastern European countries.

Table IV.1.

Competitiveness Indicators

article image
Sources: International Labor Organization, World Bank

114. Skilled oenologists are needed to apply these techniques, although turnaround times can be quite short. There are now degree-granting programs in a number of the new wine regions, such as Australia and California, that train vintners in these more industrial techniques. Due to the difference in seasons between the Southern and Northern Hemispheres, some vintners have begun to consult for multiple wineries in one year. This allows for faster technological diffusion, and can quickly raise the quality of wine produced (Giuliani, 2007). Liberal visa policies for these “flying winemakers” would be an important complement to investment incentives.

115. With the rise in labeling by wine varietal, it has become easier to introduce new wines. Wines and spirits from are accorded special protection under the World Trade Organization, and products associated with geographic regions are only allowed to be labeled as such if they are made in those regions. For example, champagne can only be made in the Champagne region in France, and sherry can only be made in Jerez in Spain.56 To get around this, California producers began to label wine according to the primary grape varietal, such as Cabernet Sauvignon. This allowed for comparisons before tasting, making it easier to try a familiar grape from a new place. However, as consumers become accustomed to these labels, it has also been easier to introduce new varietals, such as Argentina’s Malbec.

116. Hectares of grapes planted gives some indication of the possible scope for wine production in a country. Both the big new wine exporters and the Eastern European countries have similar areas planted. While this does not directly translate into production levels, it is a rough indication of how far the industry could expand. However, the quality of plantings can vary a great deal. Incentives to only increase hectares planted could, in fact, be counterproductive without the appropriate incentives for quality. Finally, plantings do not always translate into harvested grapes.

Figure IV.1.
Figure IV.1.

Hectares of Grapes Planted

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: Food and Agriculture Organization
Figure IV.2.
Figure IV.2.

Hectares of Grapes Planted

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: Food and Agriculture Organization
Figure IV.3.
Figure IV.3.

Pounds of Grapes per Hectare

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: Food and Agriculture Organization
Figure IV.4.
Figure IV.4.

Pounds of Grapes per Hectare

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: Food and Agriculture Organization

117. Grape yields per hectare give some indication of vineyard productivity, although there are important caveats. These caveats include intensity of cultivation, grape variety, climate, and whether green harvesting is practiced (whereby excess bunches are harvested early to raise quality of the remaining grapes). Yields in the big new wine producers tend to be higher than in Eastern European countries. Although many of the Eastern European countries have older, less productive vineyards, they also have vineyards that are not actively managed or harvested, lowering the estimated yield (calculated from the grape harvest and hectares planted). On the other hand, yield is also an indicator that should be targeted with caution. For example, New Zealand has lower yields than Argentina, Australia, or Chile, which reflects both vineyard management choices and grape variety. If the objective is to maximize profits, incentives to quality trump volume targets.

Wine Exports

118. World wine exports expanded by a factor of 150 from 1976 to 2006, with most of the exports coming from a few producers. The chart below shows total exports and those of the top five exporters, in billions of US$. Note that smaller producers have been gaining market share, with the share of the top five falling to 75 percent in 2006. However, the share of the top ten exporters was still 90 percent in 2006.57

119. Despite the dominance of a handful of exporters, the mix of countries has evolved over time. Traditional European producers such as France, Italy, Spain, Germany, and Portugal remain on the list for all years in the table below. However, the second-largest exporter in 1966, Algeria, disappears from the list before 1986, and newer producers Australia, Chile, and the USA make an appearance after 1986. Moldova makes an appearance in 1996, but is soon overtaken by other producers.

Figure IV.5.
Figure IV.5.

World Wine Exports

(US$ billions)

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: UN Comtrade.
Table IV.2.

Wine Exporter Rank by Value

article image
Source: UN Comtrade.

120. Despite the growth in exports, wine consumption by volume has been declining. Particularly in countries with a long tradition of winemaking, this has forced countries to pursue exporting. As much of the decline in consumption has been in everyday table wine, producers are also shifting into higher quality wines, which are less price-sensitive in the export market (Anderson, 2004).

B. Wine Exporters58

121. The experiences of different groups of countries offer some lessons for Moldovan wine exports. The big new exporters have grown very quickly, both in value terms and the number of destinations. They also tend to be larger and richer, with more developed financial institutions. The Eastern European countries have had a more difficult time since the breakup of the Soviet Union, but show some signs of recovery. The Northern African countries, despite having large exports to France historically, were never able to become permanent players in the wine market.

122. Of particular interest is how quickly these changes took place, and through which channels. Exports may increase due to more export destinations, increases in quantity, or higher prices. The most successful exporters pursued a combination of all three, suggesting high levels of innovation in the industry. In this section, brief histories of the countries are discussed, as well as statistics on the sources of wine export growth.

Big New Wine Exporters

123. The four most successful new wine exporters of the past few decades are Argentina, Australia, Chile, and New Zealand. While the institutional environments are different in each one, their rapid growth offers hope that a transformation could quickly occur in other countries. Indeed, given the advances in production and marketing techniques spurred by their rise, it is now easier to export wine from new regions. Increases on the scale of Australia are likely not feasible in the short run for the Eastern European countries, but Argentina and Chile are potential models to follow.

Figure IV.6.
Figure IV.6.

Total Exports by Country

(US$ millions)

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: UN Comtrade.

124. The vast increases in wine exports were not solely due to volume increases. Prices have risen, albeit modestly in some cases. While this partially reflects inflation over time and exchange rate movements (all prices are calculated in nominal US$), it also reflects improvements in quality. Prices for Chilean and Argentine wine have only risen modestly, but Australian and New Zealand wines now command significant premiums. In the case of New Zealand, some of the wines are produced in limited quantities, but are in high demand among connoisseurs, leading to price spikes.

125. Argentina has a long tradition of winemaking, but exports were low until recently. Many European immigrants in the early 1900s brought winemaking with them, but produced mainly table wine. Several varieties of grapes that disappeared in Europe were also retained, which later became a source for growth and differentiation. Falling domestic consumption forced producers to turn to exports.

Figure IV.7.
Figure IV.7.

Average Price of Exported Wine

(US$/Liter)

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: UN Comtrade.

126. Given the late arrival of Argentina as a large exporter, new destinations comprise a large share of exports. New destinations are ones for which exports in 1984 were less than $100,000.59 By 2000, those destinations accounted for almost half of all exports. However, since destinations quadrupled, average exports to new destinations are lower. Despite the lower returns from new markets, collectively they are very profitable, and experience higher rates of growth. As can be seen in the charts for all the big new wine exporters, the number of destinations grow approximately linearly, but the value of exports grows exponentially.

Figure IV.8.
Figure IV.8.

Exports by Argentina

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: UN-NBER World Trade Flows database.

127. Overall export growth masks some important variations at the country level. Annual growth for a country is not always positive, and exports to various destinations can also grow or shrink. The table below gives an indication of how wide these variations can be, with summary statistics for destinations that were added after 1984, but received exports for at least two years, with the additional restriction that exports the previous year were at least $250,000 (this minimizes the high growth rates associated with a low base). While the big new exporters have high average growth rates, all the countries have large standard deviations and wide ranges between minimum and maximum growth rates. As these are country-level flows, the variation in growth rates at the firm level is likely to be even more volatile. This underlines the inherent riskiness of export growth at the disaggregated level, and underscores the need for a financial sector and business environment that can cope with such risks.

Table IV.3.

Wine Export Growth to New Destinations, 1984 to 2000

(in percent)

article image
Note: To exclude outliers, only flows with at least two previous years and $250,000 worth of wine before were included.Source: UN-NBER World Trade Flows.

128. Australia is the most successful of the big new wine exporters. In 2006, it displaced Spain as the third largest wine exporter in the world, and now exports more than $2 billion. A few decades ago, Australian wine was relatively unknown, in contrast with its current high reputation. In response, Australian firms set up marketing subsidiaries to distribute their wines in the U.S., which helped them achieve market penetration. Once retail outlets were more familiar with the wines, however, the wineries moved towards direct sales, cutting out the distributional channel (Solana-Rosillo and Abbott, 1998). As it can be an expensive proposition for a winery to set up a subsidiary in a foreign country, the experience of Australian wines shows that it can be a used as a springboard for more decentralized exports later. High levels of research and development expenditure have also helped to make Australia a world leader, but with more accredited winemakers, it is also easier for other countries to benefit.

Figure IV.9.
Figure IV.9.

Exports by Australia

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: UN-NBER World Trade Flows database.

129. The Chilean wine industry is a model of technological diffusion and private sector-led growth. Although there was a wine industry geared for the (small) domestic market, it was not until the 1980s when exports began to take off, both in terms of destinations and value. This growth in exports was fueled by new winemaking techniques brought and shared by a handful of winemakers (Giuliani, 2007, and Walters, 1999). At the same time, the trade and industrial liberalization strategy pursued by the Chilean government offered fertile ground for expansion of profitable enterprises. Most of the innovations were first adopted by small firms, which were then bought or copied by larger ones once profitable strategies were established.

Figure IV.10.
Figure IV.10.

Exports by Chile

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: UN-NBER World Trade Flows database.

130. New Zealand’s strategy has been to pursue higher quality niche wines. This is partly dictated by the climate, which is cooler than the other big new wine exporters, and partly dictated by the amount of suitable land for vineyards. While overall export growth has not been as fast as other countries, value-added and prices have increased. This was aided by the willingness of vineyards to invest in newer varieties of grapes and a vibrant research and development community. Smaller wineries60 in New Zealand are also the impetus for much of the innovation, much as in Chile.

Figure IV.11.
Figure IV.11.

Exports by New Zealand

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: UN-NBER World Trade Flows database.

131. The number of destinations for New Zealand wines is thus more constrained. The demand generally comes from high-income individuals in developed countries, although with more wealthy individuals in emerging economies (such as China and India), the set of destinations could also expand.

Eastern European Producers

132. Eastern European producers struggled after the collapse of the Soviet Union. Bulgaria, Hungary, Moldova, and Romania all have long histories of winemaking, and are ideally placed to export to the EU and CIS countries. However, they all had to address land ownership transfers in the 1990s. Many times, this resulted in very small-scale landholdings. Owners were not always the most efficient farmers, further depressing productivity growth. As property right transfers can be difficult with agricultural land, investments lagged (Abrams and Yossifov, 2003).

133. Wine exports by the Eastern European countries have mostly been flat, except for Moldova. As Russia has been such a large destination for Moldovan wine, the effects of the Russian crisis in 1998 and the import ban in 2006 can clearly be seen. More positively, Bulgarian wine exports have been trending upwards recently, reflecting strong growth in Russia and Poland.

Figure IV.12.
Figure IV.12.

Total Exports by Country

(US$ millions)

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: UN Comtrade.

134. Prices for Eastern European wines are generally low, although comparable to Chile and Argentina. There is a slight upward trend since 2000, but Romania and Hungary command higher prices, despite (or perhaps because of) their lower level of overall exports. In particular, prices for Hungarian wine are almost twice as high as for Moldovan wine. Hungary’s Tokaj wines still benefit from a strong brand identity, and increasing foreign investment and technological transfer is rapidly raising quality.61

Figure IV.13.
Figure IV.13.

Average Price of Exported Wine

(US$/Liter)

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: UN Comtrade.

135. The number of destinations for Eastern European exporters is relatively low, with Moldova again an outlier. Of the big new producers, only New Zealand exports to as few destinations as Bulgaria, Hungary, and Romania. The low number of destinations for Moldovan wine again reflects the predominance of Russia (recall that flows of less than $100,000 are excluded). For both the big new exporters and the Eastern European exporters, the early 1990s were a period of growth, reflected in values and destinations. However, the Eastern European producers were not able to continue serving those new markets, with quality still being uneven and difficulties in increasing production to serve new markets (Noev and Swinnen, 2004).

Figure IV.14.
Figure IV.14.

Number of Export Markets by Country

Citation: IMF Staff Country Reports 2008, 134; 10.5089/9781451825145.002.A004

Source: UN-NBER World Trade Flows database.

136. Moldova still faces some impediments to export growth, but is well placed to compete. Given the importance of the sector for the economy, the wine industry has been extensively studied by donors. Most recently, a report prepared for the U.S. AID in 2007 surveyed Moldova’s industry and the global market for wine. It concluded that Moldova has many of the building blocks of a successful wine industry, but that cumbersome regulations hamper growth. A balance needs to be struck between ensuring quality, and allowing for innovation. Among the specific recommendations are reorienting and reorganizing Moldova-Vin, streamlining the regulatory environment, and pursuing skills enhancement.

137. The accession of Bulgaria and Romania to the EU in 2007 complicated Moldova’s diversification of export destinations. Previously, Moldova had duty-free access to Bulgaria and Romania through the Central European Free Trade Agreement (CEFTA), in addition to access to CIS countries through a separate FTA. However, duty-free access will be granted to Moldovan wine beginning in March 2008 (subject to generous quotas), after an Autonomous Trade Preferences agreement between the EU and Moldova comes into force.

138. Sustained growth, such as experienced by Chile, would contribute hugely to Moldova’s development. Although counterfactuals should always be interpreted with caution, if wine exports grew by 18 percent a year for twelve years beginning in 2008, overall wine exports would be almost $1 billion in 2019.62 Exports overall grew by roughly 28 percent in 2007, although this partially reflected a rebound after the 2006 Russian ban on imports of Moldovan wine. An important caveat is that Chile’s economy is much larger than Moldova’s (Chilean GDP was over $100 billion in 2007, in contrast to $4.2 billion), with a more developed financial sector, allowing for higher levels of investment. On the other hand, the world wine market certainly seems able to absorb such large increases in exports.

Northern African Countries

139. The export experiences of Algeria, Morocco, and Tunisia offer a cautionary tale. In the 1960s, all three were among the top ten exporters of wine. However, their wine was mostly sent to France, with whom they had long historical ties. After independence, those ties weakend, skilled winemakers left, and physical assets were not maintained or were destroyed. Other countries replaced them, and the Northern African countries never recovered their previous position. Indeed, although in 1965 the three countries exports were 28 percent of the world total, by 2000 their share had fallen to less than 2 percent.

C. Conclusion

140. This paper surveys the experience of other wine exporters for lessons for Moldova. The big new exporters, comprising Argentina, Australia, Chile, and New Zealand, have experienced sustained, double-digit growth in wine exports over two decades. The institutional environments and growth strategies of the big new exporters differ, but technological advances and continuing investments are key to sustained growth. However, the overall growth masks some significant volatility in bilateral flows, implying the need for a financial sector and business environment that can cope with significant risk and support innovation. The experiences of other Eastern European countries bears this out; after the breakup of the Soviet Union, Bulgaria, Hungary, and Romania were unable to reorient towards more lucrative markets. The experiences of the Northern African countries follow a similar pattern after the weakening of their ties with France.

141. Moldova is well placed to expand exports of wine to new markets. With a long tradition of winemaking, low labor costs, and a favorable climate, as well as advantageous access to both CIS and EU countries, export growth could accelerate over the near term. The strategy pursued by the government in streamlining regulations could also bear fruit in the wine sector, given the needs for investments and new technology. Despite the romantic image of the industry, it is clear from other countries experiences that wine has much more in common with industrial goods than with agricultural commodities. Capital investments, marketing, and distribution networks are all crucial to export success. While there are economies of scale to marketing and distribution initially, in other countries much of the innovation has been driven by smaller firms. All these factors point to the continuing need to improve Moldova’s business environment.

References

  • Abrams, B. and Yossifov, P. 2003. “The Importance of Property Rights for Economic Outcomes: Lessons from the Transfer of Productive Assets from Collective to Private Ownership in Bulgarian Agriculture,” Working Paper, Univ. of Delaware.

    • Search Google Scholar
    • Export Citation

  • Anderson, K. 2004. The World’s Wine Markets: Globalization at Work, Edward Elgar Publishing, Northampton, MA.

  • Anderson, Kym, David Norman, and Glyn Wittwer, (2002), “Globalization of the World’s Wine Markets,” Center for Economic Policy Research Discussion Paper 3169.

    • Search Google Scholar
    • Export Citation

  • Benson-Rea, M., Brodie, R.J., and Cartwright, W. 2003. “Strategic Issues Facing the New Zealand Wine Industry in a Global Environment,” Paper for the Wine Marketing Colloquium, University of South Australia, Adelaide.

    • Search Google Scholar
    • Export Citation

  • Feenstra, R. C., Lipsey, R.E., Deng, H., Ma, A.C, and Mo, H. 2005. “World Trade Flows: 1962-2000,” NBER Working Paper 11040.

  • Giuliani, E. 2007. “The Selective Nature of Knowledge Networks in Clusters: Evidence from the Wine Industry,” Journal of Economic Geography 7(2): 139–168.

    • Search Google Scholar
    • Export Citation

  • Hanf, J. H., and Schweikert, E. 2007. “Changes in the Wine Chain—Managerial Challenges and Threats for German Wine Co-Ops,” American Association of Wine Economists Working Paper 7.

    • Search Google Scholar
    • Export Citation

  • Noev, N., and Swinnen, J.F.M. 2004. “Eastern Europe and the former Soviet Union,” in: The World’s Wine Markets: Globalization at Work, ed. Kym Anderson, Edward Elgar Publishing, Northampton, MA.

    • Search Google Scholar
    • Export Citation

  • Solana-Rosillo, J. B., and Abbott, P.C. 1998. “International Entry Mode Decisions by Agribusiness Firms: Distribution and Market Power,” American Journal of Agricultural Economics 80(5): 1080–86.

    • Search Google Scholar
    • Export Citation

  • United Nations. 2007. UN Commodity Trade Statistics Database (Comtrade).

  • United Nations and the National Bureau of Economic Research. 2005. UN-NBER World Trade Flows Database, 1962–2000.

  • U.S. Agency for International Development. 2004. “Assessing Competitiveness in Moldova’s Economy,” Washington, DC.

  • U.S. Agency for International Development. 2007. “Pre-Strategy Assessment of the Moldovan Wine Sector,” Washington, DC.

  • Walters, A. 1999, “Rebuilding Technologically Competitive Industries: Lessons from Chile’s and Argentina’s Wine Industry Restructuring,” Doctoral Dissertation, Massachusetts Institute of Technology, Cambridge, MA.

    • Search Google Scholar
    • Export Citation

  • Wine Growers of New Zealand. 2002. “A Brief History of New Zealand Wine Exporting,” New Zealand.

  • World Bank. 2007. “Doing Business 2008”, Doing Business Project, Washington, DC.

  • Zaharieva, E., Gorton, M. and Lingard, J. 2004. “An Evaluation of Marketing Practices and Market Orientation in the Bulgarian Wine Industry,” Post-Communist Economies 16 (2): 229–243.

    • Search Google Scholar
    • Export Citation
52

Prepared by Irena Asmundson (PDR).

53

For example, Robert Parker.

54

Indeed,, trockenbeerenauslese (a German dessert wine) requires that grapes be individually picked to qualify for that label.

55

A 1992 study of costs for Sonoma County, CA vineyards calculated labor costs to be roughly half of operating costs.

56

Article 23 of the Trade-Related aspects of Intellectual Froperty Rights (TRIPS) agreement.

57

The relatively small value of wine trade overall stands in curious contrast to its historical importance as a tradable good, and to the large global wine market. Anderson (2001) notes, however, that traditionally only about one-tenth of global wine sales occurred across borders.

58

This section relies on two sources of data, the UN Comtrade database, which covers trade until 2006. However, due to reporting gaps by some countries, this is not as comprehensive as the UN-NBER World Trade Flows database, which covers trade from 1962-2000. The UN-NBER database is also extensively cleaned and corrected for errors. Unfortunately, beginning in 1984, trade flows of less than $100,000 were omitted. As many wine exports were below this level, the number of recorded destinations for wine exporters dropped precipitously. This also leads to biased estimates of when wine is first exported to a partner.

59

Beginning in 1984, trade flows of less than $100,000 were omitted from the UN-NBER World Trade Flows database. As many wine exports were below this level, the number of recorded destinations for wine exporters dropped precipitously. This also leads to biased estimates of when wine is first exported to a partner, but allows for a natural point at which to measure new entry.

60

Such as Cloudy Bay, which is widely credited for first adopting the now familiar New Zealand style of Sauvignon Blanc.

61

Eastern Europe is apparently a more common destination for “flying winemakers” to set up their own wineries. See, for example http://www.nytimes.com/2006/10/11/dining/11pour.html.

62

Moldovan wine exports in 2007 were roughly $136 million, and Chilean wine exports in 1993 were $129 million. Chilean wine export growth from 1994 to 2006 averaged 18 percent.

Same Series

Other IMF Content

Other Publishers

Cover IMF Staff Country Reports
Republic of Moldova: Selected Issues
Author: International Monetary Fund
Volume/Issue:
Volume 2008: Issue 134
Publisher:
International Monetary Fund
ISBN:
9781451825145
ISSN:
1934-7685
Pages:
80
DOI:
https://doi.org/10.5089/9781451825145.002

Hectares of Grapes Planted

Hectares of Grapes Planted

Pounds of Grapes per Hectare

Pounds of Grapes per Hectare

World Wine Exports

(US$ billions)

Total Exports by Country

(US$ millions)

Average Price of Exported Wine

(US$/Liter)

Exports by Argentina

Exports by Australia

Exports by Chile

Exports by New Zealand

Total Exports by Country

(US$ millions)

Average Price of Exported Wine

(US$/Liter)

Number of Export Markets by Country