Coffee demand in 2008 set to rise 2.5% to 125 mn bags

World coffee consumption in 2008 may exceed 125 million bags (1 bag = 60 kg) compared with an estimated 122 million bags in 2007, the International Coffee Organization said.

In 2006, world coffee consumption stood at 120.39 million bags. Buoyant world consumption was a key factor that supported prices, the ICO said.

Market fundamentals continue to be favourable to sustain the firm trend in coffee prices, the ICO said.

In October, coffee prices rose further, with the ICO composite indicator price at 115.71 US cents per 1 pound. "Adverse weather conditions have continued to affect most of these countries, particularly Mexico. If bad weather continues, it could affect production and quality potential for crop year 2007-08 (Oct-Sep)," the ICO said.

However, coffee producing areas in Brazil benefited from the rainfall, it said.

Total exports in 2006-07 (Oct-Sep) stood at 96.74 million bags, up 9.70 per cent from a year ago.