Sussex vineyards are set to produce more wine as a report out this week predicts a global shortage as supply outstrips demand.

Poor weather over the past three years has led to the worst shortfall for 40 years of around 300 million cases of wine, following a huge increase in demand from the US and China, according to an industry report by Morgan Stanley Research this week.

Although one million wine producers around the world produce 2.8 billion cases a year, about half of which comes from Europe, it’s not enough.

The report’s authors say production in France and Argentina has been particularly badly hit due to weather conditions, and wine prices are set to rise.

But production in Sussex is growing, says Chris Foss of the Southeast Vineyards Association, and its wine prices are good.

He said: “The south east has consistently produced very good wines and after a poor couple of years, when it has been almost embarrassing that because of the weather we have not been able to supply the demand, yields are going up in Sussex.”

Sussex’s wine industry has blossomed over the past two decades as its chalk landscape reproduces the same soil and climate conditions of France’s Champagne region, with new vineyards including the vast Rathfinny Estate near Alfriston.

Awards have been heaped on the county’s sparkling wines, with the Bolney Wine Estate at Bolney celebrating its Cuvee Rose 2009 coming eighth in the world in the prestigious International Challenge Euposia competition in Verona last month.

Sam Linter, head winemaker and MD of Bolney Wine Estate, at Bolney, said: “The English wine industry is small but very fast-growing.

“We have managed to keep up with demand but in order to continue to keep up, we are looking to buy more land adjacent to our estate to expand.”

Breaky Bottom Vineyard founder Peter Hall, near Lewes, said: “The Sussex harvest is very, very good this year, hugely good compared with the past three years.”

Mr Foss said that Sussex is “becoming the major wine-producing county in the UK”, boosting related industries such as fine dining and tourism.

He added: “Vineyards employ a lot of people in valuable and interesting jobs, and the number is set to increase.

“The number of students studying the industry at Plumpton Agricultural College has risen from 12 in 1996 to 135 now, and people are coming to us to offer them jobs.”