Africa key to meeting increased demand for coffee

March 01, 2010

Reuters

By Sarah Grainger and Marcy Nicholson

GUATEMALA CITY - Coffee production in Africa could help meet increasing global demand for the popular drink, but the continent is hampered by a lack of investment in infrastructure and technology, analysts said.

"The potential is there in Africa but it depends on investment and how quickly they act," said ICO Executive Director Nestor Osorio.

Osorio spoke at the Feb. 26-28 International Coffee Conference in Guatemala City.

Global demand continues to grow, with consumption projected to reach 134 million 60-kg bags in 2010. Meanwhile, the International Coffee Organization has estimated that global coffee output could fall possibly as low as 123-125 million bags in the 2009/10 crop year.

The Inter African Coffee Organization says Africa's share of global coffee production dropped from 27 percent in the 1980s to 12 percent in the 2008/09 crop year after quotas in the International Coffee Agreement were scrapped. The continent's weak private sector struggled to cope with liberalization of coffee production.

"The single most important thing that could be done to improve global sustainability of coffee is to transform African coffee production into a modern and progressive industry," said Peter Baker, Project Development Coordinator for CABI Bioscience.

CABI is a not-for-profit international organization based in England.

"It's all to do with finance and I think that therefore depends on the large coffee companies, where they are prepared to lay the money out to finance the increased production," Baker said.

Coffee yields in Africa are low compared to other regions like Vietnam, and preliminary data shows the carbon footprint of coffee grown in Africa is extremely low, he said.

"So if a company wanted to reduce its carbon footprint, the best thing it could do is to buy African coffee," Baker said.

As global consumption increases, higher production in Africa could fill this need. Baker said, "the sky's the limit," when asked for a production forecast on the continent.

Senior Researcher at Jimma Agricultural Research Centre in Ethiopia Taye Kufa said that coffee producing regions in Africa are the most vulnerable to changes in global climate and the market place.

"The cost of labor is increasing in most African countries," Kufa said, adding that this means low profitability for the farmers as they are less competitive on the market.

"It's very expensive for the poor farmers. Ecological sustainability is a viable option," he said.

The amount of coffee that is certified as sustainable, which typically follows a three-pillar standard for environmental, economical and social requirements, is growing globally.

Certified coffee typically comes with a premium paid to the farmer.

Baker pegged the amount of certified coffee produced globally at about 8 percent, from about 1 percent 10 years ago. The ICO puts this current figure around 7 percent.

"Africa is special. It's unique because of the opportunities and challenges," Kufa said.