Rising coffee consumption in exporting nations to affect price

The increasing domestic consumption of coffee in the exporting countries will act as a significant factor in determining the global prices of the brew, International Coffee Organisation (ICO) said. 

Coffee consumption by the producing countries has risen by almost 53% to 40.28 million bags of 60 kg each in 2010, as compared to 26.38 million bags in 2000, it added.

According to the global body on coffee, the growth in domestic consumption in producing countries, which accounts for over 30% of world consumption, is an important factor in supporting prices.  

Global consumption of the brew is expected to rise by more than two per cent to 134 million bags of 60 kg in 2010, compared to 131.3 million bags in the 2009, ICO data said.

"The relatively significant ratio between domestic consumption and production in exporting countries is becoming an increasingly important factor in the global supply and demand balance," ICO said.  

Given the share of production required to meet domestic demand in exporting countries, the increase in production will have a limited impact on the supply-demand balance, it added.

According to ICO, despite the price corrections, coffee prices remain relatively high compared to the levels recorded in 2010, encouraging an increase in exports. The world organisation on coffee also revised the output of the brew in the 2010-11 coffee year. 

"The total production for crop year 2010-11, is 133.3 million bags, compared to 123.2 million bags in crop year 2009-10, representing an increase of 8.2%," it said.