Global coffee consumption sees resilient demand in 2014

Emerging markets witnessed strong growth over the last 4 yrs averaging 4.6% annually

Global coffee consumption has been witnessing steady growth over the last three years. The consumption of coffee in the calendar year 2014 has touched 149.3 million bags, representing an average annual growth rate of 2.3 per cent over the last four years. In 2011, global consumption stood at 139.4 million bags.

The strongest growth over this time (between 2011 and 2014) has been found in emerging markets, averaging 4.6 per cent since 2011, with particularly strong demand in Russia, South Korea, Algeria and Turkey. Exporting countries have also been recording increased demand, at an average of 2.6 per cent, according to a report by International Coffee Organisation (ICO).

Brazil is by far the largest coffee consumer among the exporting countries, at 20.8 million bags for 2014, followed by Indonesia (4.2 million), Ethiopia, (3.7 million) and Mexico (2.4 million).

Traditional consuming markets, such as the EU, USA and Japan, account for over 50 per cent of the world total, but have been growing at a more modest rate of 1.5 per cent in the time period. It is thought that the move towards specialty coffee consumption and single-serve pod machines is increasing the value of demand more than the volume, although the USA and Canada are still exhibiting considerable market growth, the ICO said.

In terms of the geographical distribution of coffee consumption, Africa and Asia have been recording the most dynamic growth, of 5 per cent and 4.5 per cent, respectively, although they account for only 7 per cent and 19 per cent of the world total.

Among the Asian countries, India has been recording around 5 per cent growth in consumption over the last few years. According to Coffee Board of India, the coffee consumption stood at 115,000 tonnes in 2011.

Central America and Mexico are mostly unchanged over time on around 5 million bags, or just over 3 per cent of the world. Europe has recorded relatively modest growth over time, averaging a 0.8 per cent increase per year, while North America has registered 2.6 per cent over the time period.

Coffee consumption in South America has grown at a steady 2 per cent to reach 25.4 million bags, 17 per cent of the world total.

In summary, world coffee demand continues to show significant growth, with considerable potential for further increases. More mature markets such as the EU are relatively stable, while emerging markets, particularly in Africa and Asia, are recording significant increases, albeit from a relatively low base.

Production is estimated at around 141.9 million bags in crop year 2014-15.

Total bean exports in February 2015 came to 8.6 million bags, down 10.2 per cent over February 2014. This brings world exports for the first five months of the coffee year (October to February) to 43.4 million bags, about 1.2 million bags less than the same period in 2013-14. Shipments from Brazil dropped for the first time in 15 months, as they come towards the end of their crop year, while exports from Vietnam are also estimated lower.

The coffee market fell for the fifth consecutive month in March 2015, as speculation over the size of the upcoming 2015-16 Brazil crop continues to mount.

The ICO composite fell further in March 2015, with the monthly average down 10 per cent compared to February to reach $127.04 cents/lb. This is its lowest monthly average since January 2014. Daily price movements showed no clear trend over the course of the month, hitting a low of 120.50 cents and a high of 131.78 cents but finishing at around the same level it started. Price volatility was also notably higher in March compared to last month.