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ICO plans to promote coffee demand in developing countries


By Claudia Carpenter
Bloomberg News

September 28, 2012

The International Coffee Organization is going ahead with plans to promote coffee consumption in developing countries as part of a global effort that almost doubled growth in demand in the past 10 years.

Demand for arabica beans is already probably going to get a boost because of the increased prices of robusta, Roberio Oliveira Silva, executive director of the London-based group, told reporters in London today. Arabica beans have dropped 24 percent this year as robusta beans climbed 20 percent.

“There will be an increase in arabica,” Silva said.

Global coffee demand climbed an average 2.5 percent a year over the past 10 years, compared with 1.6 percent from 1990 to 1999, Silva said in a presentation dated this week for ICO meetings. The ICO wants to “decommoditize” coffee in growing countries in Africa and South America, according to Andrea Illy, chairman and chief executive officer of Trieste, Italy-based Illycaffe SpA who is also chairman of the ICO promotion and market development committee.

The ICO wants to support demand growth even with consumption exceeding production to get out of the cycle of high prices spurring production that lead to lower prices, Illy said. Coffee demand was 138 million bags in 2011 compared with production of 132.7 million bags, according to the ICO. Ten years ago, coffee was in surplus, Illy said.

In China, coffee consumption is still not growing in the double digits, Silva said. Younger people drink maybe one cup a week, at shops to socialize, and usually with milk, Illy said. In India, young people in the south drink coffee with chicory, he said.

Cameroon is the latest exporter to join the ICO, bringing membership to 38 exporting nations and six importing nations, Silva said. Colombia’s coffee crop is expected to recover in the 2012-13 season after a four-year rebuilding, Silva said.

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