Social distancing slows global coffee consumption growth

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Walking into a coffee shop for a chat might have been a must for you, but social distancing might have put it out of bounds. That is now reflecting in consumption trends of the world’s favourite beverage.

World coffee consumption is projected to rise by only 1.3% to 166.3 million bags during the new marketing year that began in October 2020, according to the International Coffee Organization (ICO).

While the demand is expected to gradually recover, an expected increase in global production could lead to a surplus of around 5.27 million bags at the end of the coffee year 2020/21.

The larger increase in global production against the limited recovery in consumption will lead to the surplus, ICO said.

Exports in the first three months of the coffee year were 6.1% higher at 31.59 million bags compared to the same period last year.

In 2020/21, global coffee production is projected to rise by 1.9% to 171.9 million bags. Out of this, Arabica production is expected to rise by 5.2% to 101 88 million bags, reflecting an increase in Brazil’s output.

However, Robusta production is expected to decline by 2.6% to 70.02 million bags largely due to an decrease in Vietnam’s output.

At the same time, price trends in coffee were mixed with Arabica varieties continuing to firm up through January while Robusta varieties falling through the month.

“Tightness in supplies at the start of the year, due in part to delays in harvesting as well as concerns over the impact of hurricanes Eta and Iota, have helped push prices up in the short-term,” ICO said.

“However, this is unlikely to last throughout the year as more of the current crop as well as ample supplies from Brazil’s on year crop reach the market,” it added.

Among Arabica varieties,  Colombian milds rose by 1.7% to 173.42 centa per pound while Other Milds rose by 1.8% to 169.69 cents per pound. The average price for Brazilian naturals increased by 1.5% to 116.7 cents per pound.

On the other hand, Robusta prices were 1.8% lower month-on-month at 70.71 cents per pound.

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