A massive global over-supply of wine from 2004 to 2010 that caused prices to plummet looks set to end this year.

Rabobank has released its wine quarterly report for the three months to October this year, which reveals the global wine grape production throughout the world has dramatically reduced between 2004 and 2006.

It also found that demand has begun to increase again following the slump during the global financial crisis.

The massive global oversupply of wine for four years up to 2010 that caused prices to plummet let to many growers to ripping up vines.

Now, the Rabobank report says due to the extremely low wine grape harvests in Europe, prices will once again trend upwards.

While Californian grape growers in particular are expecting bigger and better than average harvest in 2012, the bank’s analysts say this will not be enough to make up the gap from the European market.

For more, see: End to cheap wine prices is near: global decline in grapes