Trade group the International Organisation of Vine and Wine (OIV) has estimated output will reach 259.5m hectolitres (mhl) this year - a fall of 5% compared with 2015.
This would be among the three poorest years for output since 2000, it added.
However, it said it was unlikely this would affect prices in the shops.
"Some price tensions could appear in some geographic areas impacted by [bad weather]," an OIV spokesperson told the BBC.
"But very often wine producers and wine industries keep wine stocks in order to respond to such risks."
In Europe, the OIV said Italy was again set to be the world's leading producer - even though output is expected to fall 2% this year to 48.8 mhl.
But in France - the number two producer - it said production was likely to fall 12% after vineyards endured frost and hailstorms in the spring, then drought in the summer.
In South America, production was also hit by "climatic events".
As a result, Argentina is likely to report a 35% plunge in output, Chile a 21% fall and Brazil a 50% fall when compared with 2015.
South Africa, meanwhile, is on track to report a bruising 19% fall in production - but other New World producers are doing better.
The OIV said Australia was expected to see a 5% rise in production, New Zealand a 34% jump and the US - the world's fourth-largest producer of wine - growth of 2%.
World wine output is expected to hit a four-year low in 2016 after bad weather hit production in France and South America, industry forecasts say.