After 6 months of continuous falls in price, the market now seems to have turned a corner. The Liv-ex 50 has stopped its decline and is indeed edging back up.
On a longer and more important timescale, this is reflected in the Liv-ex 100 as well:
Overall, there has been a lot more activity and trade. It started a bit cautiously, but by now demand for selective wines is quite robust. Whereas last year and even in January, one could pick up top scoring Bordeaux at discounted prices, this is now increasingly difficult.
We reported brisk trade in January, with Bordeaux 1st Growths returning to center stage. This trend is continuing and indeed strenghtening: the best 1st Growths as well as 1st Growths below £3,000 are in demand.
Liv-ex have reported that trading volumes during the last 6 months of last year were low. In other words: the price drop that we saw in that period was carried by a relatively small amount of sales. Much lower than in 2008. In my opinion, that supports the view that we might see a slow return to the prices seen in the first half of last year.
Other trends to note are:
– we seem to be back to traditional names and better vintages. Brand as such is no longer good enough. "cheap" Bordeaux is in demand, yes, but contrary to popular belief, "expensive" Bordeaux is far from dead.
– At the same time, Burgundy and Italy continue to do well, as does the Rhone. There is an ongoing trend where buy-to-drink demand looks for value beyond Bordeaux. How right too.
To conclude: the real buzz at the moment is with Bordeaux 2009. Robert Parker's bottle scores are imminent (allegedly to be released on the 29th of February). As you know, they are expected to be extremely high, as Parker himself has tweeted that 2009 is the greatest vintage he has ever tasted. This has led to frantic positioning by the trade and very strong demand from our private customers, who love the vintage for drinking pleasure and for investment. Fortunately, not all 2009 prices have gone up – there are still numerous fantastic wines to be had that present quite extraordinary value for money.
Everybody's now waiting for you Mr Parker.