ECONOMY

Rising global coffee consumption helps stabilize prices

The global coffee market is showing signs of stabilization, with increasing consumption absorbing the glut in production of recent years, which had sent prices falling sharply. Statistical data presented at the third CoffeeBiz exhibition and forum in Thessaloniki, which ended on Monday, shows that the consumption of coffee – a commodity ranked in third place worldwide in terms of commercial value after oil and steel – has been rising in both producing and merely consuming countries. Current annual world consumption is estimated at 6.6 million tons of raw, unroasted coffee beans. Greece imports 21,000-24,000 tons and about as much again of roasted coffee, bringing total Greek consumption to 0.6-0.7 percent of the world total. Greece imports additional significant quantities, mainly through Thessaloniki, which are then re-exported. The traditional Greek coffee preparation relies exclusively on Brazilian beans. The world market is heavily influenced by Brazilian production, which accounts for 28 percent of the world total, and is bound to set the pace of the market in the 2004-2005 period, particularly as regards the milder Arabica varieties that are gaining in popularity. In recent years, Brazil has accounted for 33-34 percent of world Arabica production and for 20 percent of the other main category, Robusta. According to data from CECAFE (Concelio dos Exportadoras de Cafe dod Brazil) presented at the forum, this year’s production is the second highest in the last five years, after the phenomenal Brazilian crop of 2002-3. However, «supply must take into account the stocks of past years, for which there is no precise data,» industry representatives said. The last seven years have seen an estimated 12 percent rise in the domestic consumption of producing countries. This has mainly been due to a 20 percent rise in Brazil. Speakers said that the glut in world production and falling prices in recent years were caused by the attractive prices of the 1994-98 period, which induced many farmers to turn to coffee cultivation, even in previously non-producing countries. Vietnam for instance, with negligible production 12 years ago, was recently reported to have surpassed even Colombia for second place.