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Wednesday, 25 May 2011

ICO: say consumption will still increase in 2011, but will it?

The week The International Coffee Organisation (ICO) voiced confidence that regardless of the doubling of prices in the preceding year, that world coffee consumption shall continue to grow by approximately 2.5% per annum. The rising prices are seen as an impediment to consumption. They noted that this is particularly the case for the new markets in China and India, where a rapidly emergent middle class has taken up the coffee shop culture of the west and is inspiring a adaptation of coffee from the traditional tea culture.

Conceivably this is a rather go-getting prediction as with coffee being part of basket of consumer goods that are predominantly food and with rising energy costs, there is no doubt that consumers shall be careful on their consumption of more expensive coffee, which for lovers of specialty coffee, this may be good news, although there has been rumours that certain "specialty coffee" retailers are augmenting less expensive lower grade Arabica and Robusta in their coffees An increase in coffee consumption within China and India it is after all from a moderately low base (around 1-1.5 kgs a year per person), it is difficult to see anything other than a sideways track to perhaps even some small decline, within the traditional high volume consumer markets. Perhaps not Germany with its presently vibrant economy but there are many traditional coffee markets in Europe that are struggling through economic difficulties and for sure alike North America, have consumers taking more care over their grocery expenses.

Only time will tell. But we have seen that price increases have limited the coffees we have access to, this may in the long run allow us to pickup higher quality coffee at better prices, since this is a high value product, and according to the number that the ICO predict the high end demand may suffer due to the price increase at the top end. Let us hope so.

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