Colombian Coffee

Global consumption of coffee should not suffer significantly because of the crisis in the global economy, it could have some impact in certain special models of coffee, said Wednesday 8 April, the executive director of the International Coffee Organization, ICO Nestor Osorio.
In contrast, in markets where coffee consumption is not sufficiently rooted habit, as in emerging countries, it could be experienced "some kind of reduction" in the lawsuit, he admitted.
Osorio said the analysis show that the demand, whose growth rate is 2.5% per year, will maintain its current momentum and an upward trend.
"Every year is consumed two million extra bags of coffee and we are approaching 130 million bags annually worldwide," he said at a meeting on raw materials organized by the United Nations Conference on Trade and Development, UNCTAD, in Geneva.
The head of the OIC announced that this year there will be a shortfall in production due to the typical two-year cycle of Brazilian coffee, for which high yields are immediately followed by lower production.
He noted that the global deficit could be around 10%, which will add an unprecedented situation: the producers do not have sufficient reserves.
To illustrate the importance of this last factor, Osorio reported that "30 years ago, Brazil had reserves equivalent to 25% of global consumption, but now he has nothing, and the same goes in other producing countries."
"In conclusion, global production of 125 million bags of coffee, a consumption of 130 million and only $ 20 million in stocks of importers means that the balance between supply and demand is very precarious," he said.
Under these conditions, "any incident, as frost in Brazil or a severe drought here or there could strangle the market and coffee prices would skyrocket."
Speaking at the meeting of the UNCTAD, Osorio said that another "challenge" that likely will face the coffee activity to do with the choice between "food or energy."
That is, the use of land to plant crops for biofuels .
"Here I see a difficult situation in terms of sustainability for products such as coffee and cocoa," he said, to explain at once that there is "the possibility that areas where ground coffee is now being replaced by crops that are for food or energy .
This is a "real threat" involving especially Brazil and Africa, where coffee is grown on flat surfaces and can be a little less profitable.
Brazil is currently the world's largest producer of coffee, accounting for 36 percent of the market and Colombia has 8 percent, while the rest of Latin America has a market share of 19 percent.
On the consumption side, Europe account for 38 percent, North America by 22 and Central and South America by 23 percent.
The global value of coffee exports was 15,200 million dollars in 2008, while the value of this market, ie if you add up what it costs all the cups of coffee are drunk in a year is 90,000 million.

Future Purchases

# In the wake of record high prices of coffee in New York, President Alvaro Uribe proposed to encourage future purchases of grain, especially in October.
# Such a scheme, he said, would allow producers greater recovery, and hence an advantage of high prices, for economic recovery.

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Tags: Africa , Central America , South America , Latin America , Brazil , Brazilian Coffee , Colombia , future purchases , consumption of coffee , coffee prices , global economic crisis , market shares , Europe , exports of coffee , materials raw , Nestor Osorio , North America , New York , International Coffee Organization

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