Coffee consumption in exporting nations key factor in determining global prices: ICO

Thursday, 21 July 2011 00:00 - - {{hitsCtrl.values.hits}}

New Delhi, July 19: The increasing domestic consumption of coffee in the exporting countries will act as a significant factor in determining the global prices, the International Coffee Organisation (ICO) has said.

Coffee consumption by the producing countries has risen by almost 53 per cent to 40.28 million bags of 60 kg each in 2010 compared with 26.38 million bags in 2000, it added.

According to the global body on coffee, the growth in domestic consumption in the producing countries, which accounts for over 30 per cent of world consumption, is an important factor in supporting prices.

Global consumption of the brew is expected to rise by more than two per cent to 134 million bags of 60 kg in 2010 calendar year compared with 131.3 million bags in the 2009 calendar year.

“The relatively significant ratio between domestic consumption and production in exporting countries is becoming an increasingly important factor in the global supply and demand balance,” the ICO said.

Given the share of production required to meet the domestic demand in exporting countries, increase in production will have a limited impact on the supply-demand balance, it added.

According to ICO, despite the price corrections, coffee prices remain relatively high compared to the levels recorded in 2010, encouraging an increase in exports.

The world organisation on coffee has also revised the output in the 2010-11 coffee year.

“The total production for crop year 2010-11 is 133.3 million bags compared with 123.2 million bags in the crop year 2009-10, representing an increase of 8.2 per cent,” it said. (The Hindu Business Line)