Liv-Ex Index

[Whiner]

I use the Liv-Ex site to keep track of current sale prices.

Looking at the index which I believe commenced around 2001 with a value of 100, I noticed that the first four years ie to circa 2005 showed little change. At this point however the index 'took off', to reach 240 or thereabouts before falling due to the current recession.

This seems counter intuitive in that i would expect a more or less steady rise over the past 8 years.

My question is what caused this effect and could it happen again?

[bordelais99]

I am not sure if this is 100% correct but i believe that it has a lot to do with the chinese market. In 2005 i think the chinese government changed the laws on wine importation and as a result wine imports have increased two fold year on year since. With the increasing popularity of red bordeaux especially Lafite in asia, and with Hong Kong overtaking both UK and US in wine auction sales ($14.5 m compared to 8 and 10 respectively) there seems to be a certain link between the asian market and the index price on liv-ex increasing sharply in the last few years.

Well thats how i see it.

[IJG]

Hi!

I would like to ask You for some help. I am writing a study about wine investments and after analyzing the market, there some aspektst, I simply can't understand. When You look at the liv-ex 100 linde, untill 2006 the value keeps stagnating, but after that there is a huge and very fast rise. There most be an explanation to that, does someone know, what has happen that time. Something must have changed radically...
The other thing, which doesn't make sense for me is the case of futures, on En primeur. If the cost of carriage is high, why aren't traded these instruments like stock? You can trade with a stock, it can be serold 1000 times, before it finally gets carryed. Would it not be cheaper?
Thanks a lot in advance!

[palebluesky]

With regards to the 96 stagnate you have to remember that sub par vintages can effect all sales and put the market down as it is a micro economy.

second you have to know that huge amounts of the best en primeur is sent to the UK. It cost in large bulk very  little probably around 10 Pounds per case for the wines to be transported. And because the prices do increase so rapidly, the transport costs and buying audience in the UK make it really worthwhile