A new report from agribusiness bank, Rabobank has estimated that global wine grape production could drop between two and four percent in 2014.
The prediction follows a year of decade production-highs produced in 2013 with Australia, Chile and Argentina now all recording official decreases in the amount of wine produced.
Marc Soccio, senior analyst at Rabobank told ABC News that the impressive 2013 harvest has demonstrated that there is still capacity for the industry to produce large volumes of wine.
"There was a seasonal lull in production for around three years, but last year we saw that even though there has been some restructuring to try and realign supply and demand, the potential for the world to produce a hell of a lot of wine is still there," he said.
Although production in Australia has dropped by around 7 percent from 2013, Soccio says that there is still a great deal of wine available in the global market, meaning that export prices will remain depressed for some time yet.
"It's not a sharp enough drop to see immediate run up in demand for Australian stocks," he said
In October 2013, the Winemakers Federation of Australia said that Hunter Valley wine producers in particular were suffering a significant financial hit due to the oversupply of Australian wine.
"Well for Hunter wine growers, they've got to compete with wines from all across Australia," said chief executive of the Peak Body, Paul Evans at the time.
"If there is an over-supply of course that competition increases.
"That competition is extremely fierce at the moment and that reduces margins and profitability for everybody."