Brazil brews more coffee as beans get tastier – ABIC

Thursday, 26 January 2012 00:00 - - {{hitsCtrl.values.hits}}

SAO PAULO(Reuters) : Brazil is guzzling coffee like never before, but even as its growing middle class becomes more willing to pay for better quality beans, the largest coffee producing country does not look poised to topple the United States as the world’s No. 1 consumer yet.

Coffee consumption in Brazil grew 3.1 percent from November 2010 to October last year to 19.7 million bags, about 45 percent of what the country’s farms turn out each year, the coffee industry association ABIC said on Wednesday.

That was below a forecast for consumption growth of 5 percent ABIC made early last year. Firm prices all year due to a global shortage of good quality arabicas pushed coffee export revenues in 2011 up by more than half compared with 2010.

ABIC attributes coffee’s comparatively rapid growth in the emerging economic power to increased disposable income that is also making consumers fussier about the coffees they drink in a nation long-accustomed to dark-roasted, lower-cost brews.

“In 2000, there was not a single gourmet brand in the supermarkets ... today there are 100,” said ABIC’s executive director Nathan Herskowicz at an event it held in Sao Paulo to present coffee consumption trends in Brazil.

Table-top domestic espresso makers have become a fast-selling and fashionable accessory in Brazilian homes. The local industry has also tightened rules for the minimum standard of coffee marketable in Brazil with less tolerance for impurities.

“With the increase in purchasing power, people have choice and the product has gone from necessity to something enjoyable,” said Bernardo Wolfson, ABIC vice-president and the top executive at Melitta, a large manufacturer of coffee-making machines.

A year ago, ABIC forecast that Brazil might overtake the United States as the world top coffee consumer by the end of 2012 but growth at a rate slower-than-hoped means reaching the top spot is now unlikely even in 2013.

ABIC forecasts consumption in Brazil will grow 3.5 percent in 2012 and expects demand to reach 21 million bags by 2013, while the U.S. currently consumes around 23 million, according to data from its government, and its consumption is rising.

ABIC’s president says although coffee prices have shot up, the industry absorbed most of this cost and Brazil’s consumption growth remains far ahead of the global average of 1.5-2 percent a year.

New York ICE arabica futures are trading at more than $2 a pound, nearly 30 percent off highs set in the first half of 2011 but still nearly twice the going rate in early 2010 and earlier.

Roughly 75 percent of Brazil’s coffee crop is arabica, with the rest of its output a local form of robusta known as conilon. Traditionally most arabica is exported with the robusta being consumed locally and sold overseas in the form of soluble or instant coffee.

Per capita consumption of roasted coffee in Brazil reached a record 4.88 kilograms, up from 4.81 kg the year earlier, ABIC said. Scandinavian nations lead the way for consumption per person, drinking roughly twice this amount.