United Nations Conference on Trade and Development
10th MULTI-YEAR EXPERT MEETING ON COMMODITIES AND
DEVELOPMENT
25-26 April 2018, Geneva
State of the global coffee market
By
Dr Christoph Sänger
Senior Economist
International Coffee Organization
The views expressed are those of the author and do not necessarily reflect
the views of UNCTAD.
State of the global coffee
market
Dr Christoph Sänger
Senior Economist
International Coffee Organization
Supply &
Demand
World coffee production
• 159.7 million bags in crop
year 2017/18
• 1.2% increase on 2016/17
• Arabicas ↘ 4.6%
• Robustas ↗ 12.1%
0
20
40
60
80
100
120
140
160
180
14/15 15/16 16/17 17/18
Arabica Robusta
149.1 152.1 157.7 159.7
Demand for coffee by market
• Large potential for further
growth in exporting countries
and emerging markets
• Per capita rates still well below
those in traditional markets
• Particularly in countries with
large populations (China, India,
Indonesia)
• Brazil as the model for other
countries to emulate (domestic
consumption)
Global demand
• Increasing by 1% in
coffee year 2017/18
• Still strong demand in
many countries,
particularly some
traditional markets
• But biggest potential is
in emerging markets and
exporting countries
158.9157.4155.8151.7
0
20
40
60
80
100
120
140
160
180
13/14 14/15 15/16 16/17 17/18
mill
ion
60
-kg b
ags
Importing Exporting
148.9
Supply/Demand Balance
142
144
146
148
150
152
154
156
158
160
162
13/14 14/15 15/16 16/17 17/18
mill
ion
60
-kg b
ags
Production Consumption
Prices
Daily ICO indicator prices
50
75
100
125
150
175
200
225
Mar-16 Jul-16 Nov-16 Mar-17 Jul-17 Nov-17 Mar-18
US
cen
ts/l
b
Colombian Milds Other Milds Brazilian Naturals Robustas
Market
trends
Development of coffee trade flowsAvg. 1992-1996 Avg. 2012-2016
60-kg bags
5 m
illio
n
10 m
illio
n
60-kg bags
5 m
illio
n
10 m
illio
n
Domestic consumption increases
77%
72%
0
50
100
150
1992-1996 2012-2016
Mill
ion
60-k
g b
ag
sTotal production
Exportable production
Value-added
94%
91%
0.1%
0.3%
5.9%
8.7%
0
20
40
60
80
100
Mill
ion
60-k
g b
ag
s
1992-1996 2012-2016
Green Roasted Soluble
Outlook
Impact of climate change on coffee
production
• Global warming affects coffee production via two
pathways:
1. Changes in rainfall patterns & temperatures
make regions unsuitable for production
2. Change in climatic conditions facilitates spread
of pests and diseases (e.g. Coffee Leaf Rust)
• Both Arabica and Robusta are negatively affected by
climate change
Suitability of current Arabica area in 2050
Source: Bunn et al. 2015
Suitability of current Robusta area in 2050
Source: Bunn et al. 2015
Investment is required to meet rising
demand for coffee
Conclusions
Conclusions
• Demand grew by more than 50% since the 1990s
• Coffee remains primary commodity with most of value-added generated in importing countries
• Market in surplus for 2nd consecutive year
• Prices remain low affecting profitability and investment
• BUT: threat of climate change is looming and investment in adaptation is required
Top-10 coffee producers
0
10
20
30
40
50
60
Brazil Vietnam Colombia Indonesia Honduras Ethiopia India Uganda Peru Mexico
mill
ion 6
0-k
g b
ag
s
2014/15 2015/16 2016/17 2017/18
Concentration on exporting side
PIE CHART
1
2
3
4
5
6
7
8
9
10
11
1992-1996 2012-2016
Brazil23%
Colombia17%
Indonesia7%Côte d'Ivoire 4%
Uganda 4%
Vietnam 4%
India 3%
Costa Rica3%
Other25%
Brazil29%
Vietnam20%
Colombia9%
Indonesia7%
India5%
Honduras4%
Peru3%
Uganda3%
Guatemala3%
Ethiopia3%
Other14%
Guatemala 5%Mexico 5%
Diversification on importing side
2012-2016 1992-1996
3 countries 47%
Other10%
18 countries
43% of imports
4 countries47%
Other10%
36 countries
43% of imports
Arabica vs. Robusta
69%
62%
31%
38%
0
20
40
60
80
100
Mill
ion
60
-kg
ba
gs
1992-1996 2012-2016
Arabica Robusta
Breakdown of total exports by form (2015)
Growth in global demand by region (CAGR)
+0.15%
+2.16%
+0.67%
+0.72%
+1.90%+1.10%
Growth in global demand imp/exp (CAGR)
+1.28%
+1.26%
World shares of consumption
Coffee production in China by type
Development of coffee production and
exports in China
Exports
CAGR 14.9%
Production
CAGR 17.5%
Will positive supply trend continue?
0
20
40
60
80
100
120
140
160
mill
ion
60-k
g b
ag
s
Average annual production
0
200
400
600
800
1000
1200
1400
0
2000
4000
6000
8000
10000
12000
14000
kg
/ha
tho
ush
an
d h
ecta
res
Area Yield
Consumption in China
CAGR 14.7%
Consumption in China (2004-16) vs. Japan (1964-76)
Market size in selected Asian countries
Source: Euromonitor International, Hot Drinks, 2016 Research Edition
Market size China (by form)
Source: Euromonitor International, Hot Drinks, 2016 Research Edition