Kochi: If the current growth in coffee consumption in certain countries continued to persist there will be a corresponding increase in demand for the beverage in the world market.
The per capita consumption of coffee in Brazil is at 6 kg and at this rate of growth it would join the US by 2010 as one of the largest coffee consuming market, according to a report. There will be around 20 million consumers in less than three years, it said.
Potential for growth
Another region where there is a potential for growth in coffee consumption are the coffee growing countries in Africa. Ethiopia, which is the largest producer of coffee in the continent, has a per capita consumption of 4 kg only. “If the 110-million people in the East African nations could raise its domestic consumption to 2 kg a person, it would consume three-quarters of its output.” At the same time, the output growth in Africa continued to show a declining trend.
Africa, which used to have one-third share in the world production in the 1970s, has reduced its share to 12 per cent now. This phenomenon has also contributed to the decline in world output. In fact, Africa has one-third of the total area under coffee in the world.
According to the International Coffee Organisation (ICO), African coffee production and quality had been affected by liberalisation of the sector which has allowed unscrupulous individuals to join the coffee marketing without conforming to the best practices. He said that it is important to strengthen the coffee sector and promote its sustainable expansion in a market-based environment for the betterment of all the participants in the sector.
Tight supply position
However, there exists a tight supply position in the world coffee market now and a “fundamental balance is taking place”, according to industry sources.
During 2007-08, there was a sharp fall in global coffee supply and as a result there was a near equilibrium in demand and supply, Anil Kumar Bhandari, former President of Upasi and a grower told Business Line. Add to this, the declining trend in the equity market had paved the way for a shift towards the commodity markets, he said.
The price in the International Coffee Exchange (ICE) New York was moving up and March contract on Monday was quoted at 165.40 cents/lb, Bhandari said. The tight supply position was likely to continue as the growers world over were holding their crop anticipating that the prices would go up. The roasters were, in fact, buying hand-to-mouth, he pointed out.
The total supply during 2007-08 was estimated at 89.46 lakh tonnes (lt) against 94.51 lt in 2006-07. Exports in 2007-08 dropped to 57.79 lt from 60.73 lt.
The Indian output has also declined and, as a result exports during January 1 - March 5 fell to 37,899 tonnes from 40,086 tonnes in the same period last year.
Given this scenario, the green coffee prices continued to rise sharply over the past three weeks, industry sources added
The per capita consumption of coffee in Brazil is at 6 kg and at this rate of growth it would join the US by 2010 as one of the largest coffee consuming market, according to a report. There will be around 20 million consumers in less than three years, it said.
Potential for growth
Another region where there is a potential for growth in coffee consumption are the coffee growing countries in Africa. Ethiopia, which is the largest producer of coffee in the continent, has a per capita consumption of 4 kg only. “If the 110-million people in the East African nations could raise its domestic consumption to 2 kg a person, it would consume three-quarters of its output.” At the same time, the output growth in Africa continued to show a declining trend.
Africa, which used to have one-third share in the world production in the 1970s, has reduced its share to 12 per cent now. This phenomenon has also contributed to the decline in world output. In fact, Africa has one-third of the total area under coffee in the world.
According to the International Coffee Organisation (ICO), African coffee production and quality had been affected by liberalisation of the sector which has allowed unscrupulous individuals to join the coffee marketing without conforming to the best practices. He said that it is important to strengthen the coffee sector and promote its sustainable expansion in a market-based environment for the betterment of all the participants in the sector.
Tight supply position
However, there exists a tight supply position in the world coffee market now and a “fundamental balance is taking place”, according to industry sources.
During 2007-08, there was a sharp fall in global coffee supply and as a result there was a near equilibrium in demand and supply, Anil Kumar Bhandari, former President of Upasi and a grower told Business Line. Add to this, the declining trend in the equity market had paved the way for a shift towards the commodity markets, he said.
The price in the International Coffee Exchange (ICE) New York was moving up and March contract on Monday was quoted at 165.40 cents/lb, Bhandari said. The tight supply position was likely to continue as the growers world over were holding their crop anticipating that the prices would go up. The roasters were, in fact, buying hand-to-mouth, he pointed out.
The total supply during 2007-08 was estimated at 89.46 lakh tonnes (lt) against 94.51 lt in 2006-07. Exports in 2007-08 dropped to 57.79 lt from 60.73 lt.
The Indian output has also declined and, as a result exports during January 1 - March 5 fell to 37,899 tonnes from 40,086 tonnes in the same period last year.
Given this scenario, the green coffee prices continued to rise sharply over the past three weeks, industry sources added
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