Filling the coffee supply gap
From the May 2012 issue.
The most conservative projections are expecting demand to expand by 13 to 15 million 60-kilogram bags in the next five years alone. The question now is: where is all that coffee going to come from?
Story by Maja Wallengren
When producing countries plunged into crisis 10 years ago from an oversupply of coffee, much of the debate centred on the need to improve quality to boost consumption. It seems ironic, that a decade later this ‘quality campaign’ has spawned its own crisis on the other end of the equation – it would now seem that demand is far outpacing supply.
For importing countries, especially key markets of the United States and Europe, the growing gap between demand and supply is not only likely to impact the already volatile business of roasters and other industry stake holders, but could even lead to massive losses in jobs and revenues in the not too distant future. Any significant shortcuts in the quality of beans being drunk have always proven to lead to a drop in consumption that effects the entire coffee chain on the retail level. That is, unless swift action is taken to restore the balance.
Demand curves showing how this rapid growth will impact world supplies have been circulated at conferences for several years. The International Coffee Organisation (ICO) has now decided to put more focus on what is believed to be a growing problem. In its latest market report, the ICO’s Executive Director Roberio Silva said growing demand, whether at a conservative 1.5 per cent or keeping up with the 2.5 per cent growth seen in the last 10 years, will more than likely lead to supply problems in a not too distant future.
“Under all these scenarios, relatively strong consumption growth is envisaged, which could well outpace production growth,” said Silva.