A very promising statistic has come from the International Coffee Organisation in its Monthly Coffee Market Report for May. According to its figures, the world’s coffee consumption could possibly increase by 25% over the next eight years.
There have been fears about ‘oversupply’, with one international banking organisation recently saying that global production will be higher than consumption in 2012-13, although the same organisation reported that the reverse happened in 2011-12, and there will be another deficit in 2013-14 – coffee traders are extremely well used to the ‘cycles’ of over over-producing and under-producing seasons.
Now, in its monthly production statistics, the ICO has predicted that both production and demand will increase considerably by 2020. The organisation estimates world production in the 2011-12 year at 137.9 million bags, and that figure could exceed 170 million bags by 2020.
“Prospects of a high production level in Brazil in crop year 2012-13, and increased production in some exporting countries encouraged by relatively high prices, have doubtless triggered speculation on the possibility of an oversupply in the world market,” wrote the ICO. “Nonetheless, a brief analysis of world consumption during the last 22 years confirms the buoyancy of consumption, particularly since 2000. Prospects of a continuing demand for coffee remain promising, particularly in emerging markets and exporting countries, in addition to the growth of niche markets.
“Buoyant world consumption should help maintain a fair balance between supply and demand.”
Asked whether such an increase in consumption is really likely, the ICO replied:
“Our report indicates that if the consumption growth rate continues to be around 2.5%, consumption could exceed 170 million bags by 2020. The strong growth rate is 2.5%, which was recorded over the last 10 years.
“Given that consumption in exporting countries and in emerging markets has had annual growth rates of 4.4% and 4.3%, this is not totally unrealistic.”