ICO study analyses coffee market in the last 50 years

Over the past 50 years, the coffee market was characterized by a period of the regulated market with direct intervention through a system of export quotas, and a second time without direct intervention, from 1990 until now, according to the International Coffee Organization (ICO).
The study of body levels of prices during the regulated market were relatively high, since the oscillations were corrected by applying the quota says the entity study. But from 1999 to 2004 was the biggest crisis of lower commodity prices, with negative consequences on the economies of countries exporting coffee, said ICO. However, the recovery in prices of the product began in the 2004/05 season, although the oscillation remained in the market and the cost of production inputs, especially fertilizer and labour, continued to rise. The supply situation, a major source of volatility in commodity prices, is a major concern of the world coffee market.
The average annual growth rate of world coffee production between seasons 1963/64 and 2012/13 was 2.3%, with 2.8% in the regulated market and 2% during the "free market."
The average production during 1990/91 to 2012/13 was 112.8 million bags compared to 76.3 million between 1963/64 to 1989/90's. With the exception of Africa, all coffee growing regions have seen a steady growth in its production.
The world coffee consumption increased at an average annual rate of 1.9% during the last 50 years, from 57.9 million bags in 1964 to 142 million in 2012. This increase was greater from 1990 to 2012, says ICO, with average growth of 2.1% per year. During the last decade, world consumption grew considerably, from 105.5 million bags in 2000 to 142 million in 2012, an increase of 34.6% in 12 years. Led by Brazil, domestic consumption in exporting countries grew significantly, 64.7%, from 2000 to 2012, to 43.5 million bags, representing 30.6% of world consumption in 2012.
Emphasis on increasing coffee consumption in emerging markets, which went from 2.9 million bags in 1964 to 27.9 million bags in 2012 , an increase of 855.1% . In the coming years, these markets should continue to grow, the ICO estimates.
Already in the importing countries, the consumption of the product increased at lower rates, 47.5 million bags in 1964 to 98.6 million in 2012, and an increase of 107.57%. From 1990 to 2012, the average annual growth rate of consumption in these markets was 1.5%.
The ICO study indicates that the world production has steadily increased during the past 50 years despite weather problems. It would be difficult to maintain, especially given the increase in production costs, as a result of problems related to pests and diseases that could affect the expansion. Moreover, a changing climate could also have a negative impact on farming in many countries unless urgent research could bring adaptation solutions. On the other hand, there are prospects of increased worldwide demand for coffee, especially in emerging and exporting countries, as well as expansion of niche markets in traditional consuming countries of the product.
The growth of global consumption could maintain a balance between supply and demand, concludes the ICO study.
Source: Revista Cafeicultura