A new report from regional lender Rabobank suggests that Australia now has more than 2bn litres of wine in storage, equivalent to 2.8bn bottles.

Rabobank analyst Pia Piggott warned that it will take years for Australia to work through its current wine glut.

However, there was also some positive news earlier in the month, as the Chinese Commerce Ministry announced it is dropping 80.5% anti-dumping tariffs and countervailing duties on Australian barley.

That sparked optimism among Australian exporters that an end to the diplomatic row could now be in sight, leading to the end of the punitive tariffs on wine, meat and seafood.

Prime Minister Anthony Albanese has promised to stand up for wine exporters when he meets with Chinese president Xi Jinping next month.

He said the resumption of the barley trade between the two nations – previously worth A$900m (£455m) per year – was ‘a huge win for Australian farmers and Australian jobs’, along with Chinese consumers.

‘And all those points hold true for Australian wine,’ said Albanese.        ‘We want to see these removed, in the best interests of everyone – and I’ll certainly be taking the opportunity to make that point when I next have the chance to meet with President Xi.’

However, Piggott warned that even a ‘best-case scenario’ – which includes the tariffs being removed and Chinese consumption of Australian wine quickly recovering – would ‘not be a panacea’ for the current oversupply issues.

‘In our base-case scenario, it will likely take the industry four years to reduce oversupply, but even in an optimistic scenario where the tariff is removed and Chinese consumption recovers quickly, it will still take the industry two years to work through surplus wine,’ she said.