Despite an expected 1.7% recovery in production in the 2022/23 marketing year, the global coffee market is likely to see the second straight year of supply deficit, due to continuing growth in consumption of 1.7% for the current year following a 4.2% rise during 2021/22, according to the first edition of a new semiannual publication, the Coffee Report and Outlook, by the International Coffee Organization.
The shortfall will amount to some 7.2 million bags, compared to total production of 171 million bags. That's the second gap in a row exceeding 7 million bags. Production fell by 1.4% in 2021/22.
South America is forecast to remain the world's largest producing region, with an output rise of 6.2% to 82.4 million bags in 2022/23, driven in part by the biennial upturn in the arabica crop. This growth follows the region's biggest production drop in nearly two decades when output fell 7.6% in 2021/22 to 77.5 million bags during Brazil's down year and bad weather in Colombia, Honduras, and other countries.
In contrast, the Asia & Pacific region, ranking second, had a bumper year in 2021/22, rising 8.7% on higher prices and good weather to 52.1 million bags.
Global prices were strong in coffee year 2021/22, when the ICO Composite Indicator Price (I-CIP) averaged US Cents 197.9/lb, almost double the level seen during the recent low year of 2018/19.
On the consumption side, growth is being led by two producing regions, Africa and the Caribbean/Central America and Mexico, up 4.1 and 2.6% respectively in 2022. Europe remains the leading market, consuming 55.3 million bags, but growth is flat at 0.1%
The ICO bases its 2022/23 production forecast partly on expectations of a drag on production by high fertilizer costs and continuing bad weather, especially in the Americas and Africa. Overall, however, productivity is on the rise thanks to better agricultural practices, while land under cultivation of coffee continues to expand.
Read the report at https://icocoffee.org
Comments (1)
Comment FeedArticle
sintayehu Girma more than 1 year ago