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Coffee Industry in figures

 

Three large producers

Coffee is produced in more than 50 countries. Annual production (110 million 60 kg bags, or 6–7 million tonnes) and export value (US$ 5–6 billion) are both twice that of cocoa and tea.

Three countries, Brazil, Colombia and Viet Nam, account for almost 60% of world production. Latin American countries combined account for 63%.

Brazil currently supplies about a third of world production but the proportion has varied significantly over the years: 48% in 1852; 75% in 1900; 19% in 1964, jumping to 46% a year later in 1965; and 26% in 1993. Brazil has a cost advantage due to high efficiency, for example, through automatic harvesting and irrigation. Frost and drought have been the main causes for fluctuations in production, with a corresponding influence on world prices.

Viet Nam entered the scene in the late 1980s. It increased production from around 500,000 bags in 1986 to about 12 million bags yearly since 2000 — around 11% of world supply. Almost all coffee from Viet Nam is robusta.

Colombia also produces about 12 million bags per year, all of it arabica.

Annual average coffee production

2000-2003 in million 60 kg bags

Country
Arabica
Robusta
Total
Brazil 29 7 36
Colombia 12 - 12
Mexico 5 - 5
Guatemala 4 - 4
Others, Latin America 63% 12 1 13
Latin America 62 8 70
Ethiopia 4 - 4
Côte d’Ivoire - 3 3
Uganda - 3 3
Others, Africa 3 2 5
Africa 13% 7 8 15
Vietnam - 12 12
Indonesia 1 5 6
India 2 3 5
Others, Asia/Pacific 1 2 3
Asia/Pasific 24% 4 22 26
World total 73 38 111
65%
35%
100%

Source: Data is primarily from ITC’s Coffee — An exporter’s guide and the ICO. Figures are rounded to show magnitudes and trends in recent years rather than details. “–” means less than 0.5 million 60 kg bags.

Coffee producing countries

Consumer profiles

Country
Million 60 kg bags
Arabica/robusta ratio
Kg per capita 2001-2002
United States
19
76/24
4.0
Canada
4
75/25*
4.7
Germany
11
76/24
6.7
France
6
50/50*
5.4
Italy
5
56/44
5.4
United Kingdom
2
50/50*
2.2
Nordic Countries
4
96/4
9.3
Japan
7
73/26
3.2
Russian Federation
2
35/65*
0.6
Brazil
14
65/35
4.0

* Figures for countries with high imports of blends are estimates, “Nordic countries” refer to Denmark, Finland, Iceland, Norway and Sweden, which have about 20 million inhabitants combined, with very similar profiles for coffee consumption.

Consumer profiles vary

The Nordic countries have the world’s highest coffee consumption per capita with close to 10 kg per year, almost all of it being arabica. The United States is the world’s largest market, but the annual per capita consumption is much lower. It has dropped during the last 30 to 40 years from about 7 kg to 4 kg. It is noteworthy that Brazil is the second largest market in the world and has a per capita consumption as high as that of the United States.

But coffee is not just coffee! Robusta makes up around 24% of consumption in the United States and Germany — up from around 13% in 1990. In some countries robusta now makes up 50% or more of consumption.

Coffee consumption in the world
Yearly per capita kilograms
Finland
10.58
Denmark
9.99
The Netherlands
9.85
Norway
9.77
Sweden
8.78
Switzerland
7.82
Germany
7.16
Austria
6.78
Belgium-Luxemburg
5.96
France
5.69
Italy
4.95
Spain
4.49
Cyprus
4.14
USA
4.10
Portugal
3.90
Japan
2.83
United Kingdon
2.44
Greece
2.08
Ireland
1.47
Fiji
0.23

The meaning of “coffee price”

The price for coffee is usually expressed in US$ per pound (lb.), FOB (free on board) as agreed between an exporter and an importer. The dominating benchmark is the price of the “C” contract for a well-defined minimum-quality arabica coffee traded at the New York Board of Trade (NYBOT).

Other common references are the price for standard robusta coffee contracts traded at the London International Financial and Futures and Options Exchange (LIFFE) and the International Coffee Organization (ICO) composite indicator price based on a basket of four types of coffee calculated by the ICO.

Coffee prices varied significantly in the 1990s, but the price for the “C” contract was, on average, twice the level of today’s price. On 29 April 2004, the three benchmark prices were:

  • NYBOT — 70.10 US cents/lb. FOB (arabica)

  • LIFFE — 32.75 US cents/lb. FOB (robusta)

  • ICO — 58.18 US cents/lb. FOB (basket of four coffees)

For several years, fair-trade organizations have used US$ 1.26 per lb. as the minimum price for the arabica quality currently traded at around US$ 0.70. Farmers/producers are typically paid about 60% to 70% of the FOB price. The percentage depends on several factors, including the ownership of processing facilities, services provided by others and government policies.

Standard contracts and futures markets

Most of the international trade of coffee is based on standard contracts from the European Coffee Federation (ECF) or the Green Coffee Association (GCA) in the United States. Seller and buyer must agree on quantity, quality, packing, shipment, price and payment conditions. Parallel to this physical market is the futures market, also known as the commodity exchange or terminal market.

The primary purpose of the futures market is to transfer the price risk of a commodity from those who do not want to accept it (the above-mentioned sellers and buyers of coffee — “hedgers”) to those who do accept the risk against a premium (“speculators”).

The main futures markets for coffee are NYBOT, which is the parent company of the Coffee, Sugar and Cocoa Exchange (CSCE) for arabica coffee and LIFFE for robusta. Smaller futures markets for coffee are found in Brazil, France, India and Japan.

Trading houses and roasters

Five international coffee trading houses cover about 40% of the total volume of green coffee imports worldwide (in alphabetical order): Dreyfus (France); EDF Man/Mercon (UK); Esteve (Brazil); Neumann (Germany); and VOLCAFE (Switzerland).

Ten roasters account for 60% to 65% of all sales of processed coffee, most of it sold under brand names. The four largest groups are (in alphabetical order): Kraft Foods (USA); Nestlé (Switzerland); Procter & Gamble (USA); Sara Lee/DE (USA/The Netherlands).

 

 

Total articles: 2462



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