Global coffee demand may outstrip output: ICO

According to a London-based global body International Coffee Organisation (ICO), global demand for coffee is expected to continue to outstrip supply in the coming months due to tight stocks, amid a downward revision of the world’s coffee production in 2009-10.

Global coffee output was revised downward by 4.68 per cent to 122 million bags for the 2009-10 crop year from 128 million bags in the previous year. The report estimated the global demand for coffee across the globe in 2009 at 132 million bags.

“Bearing in mind the outlook for production, it is likely that demand will continue to outstrip supply in the coming months,” ICO said in its latest market report.

The report further added that the decline in production in Central American countries, especially Costa Rica, Guatemala and Nicaragua, has accounted for this substantial revision.

Consequently, stocks have started depleting both in exporting and importing countries since they are drawn down to offset the reduction in supply, ICO noted.

Stocks in importing countries were estimated to have fallen to 22.6 million bags towards the end of December, 2009. Even certified stocks of the London and New York futures markets are continuing to fall, it said.

The world’s biggest consuming countries are the US, Brazil, Germany and Japan.