Outlook for the World Coffee Market ASEAN INTERNATIONAL SEMINAR ON COFFEE 12 13 June 212 Kuta, Bali, Indonesia José Sette Head of Operations ICO Composite Indicator Price (in current terms) Monthly averages: March 1965 to May 212 34 32 3 28 26 24 22 2 US cents/lb 18 16 14 12 1 8 6 4 2 1
ICO Composite Indicator Price Monthly averages: March 1965 to May 212 deflated by UN index for manufactured goods exports (2 = 1) 6 55 5 45 4 US cents/lb 35 3 25 2 15 1 5 ICO Group Indicator Prices (in current terms) Monthly: January 2 to May 212 325 3 275 25 225 centavos de US$ por libra-peso 2 175 15 125 1 75 5 25 Colombian Milds Other Milds Brazilian Naturals Robustas 2
Arbitrage: New York London Monthly averages 2 nd & 3 rd positions (Jan/2 to May/212 2 18 16 14 12 US cents/lb 1 8 6 4 2 World Production Crop years 2/1 to 211/12* 15 14 13 123.22 128.2 128.2 123.11 134.2 131.4 12 11 113. 17.7 16.3 116.3 111.4 116.6 1 9 milhões de sacas 8 7 6 5 4 3 2 1 2/1 21/2 22/3 23/4 24/5 25/6 26/7 27/8 28/9 29/1 21/11 211/12* 3
Production: 1 Leading Producers (Volume in bags) 21/11 211/12* % change Brazil 48 95 43 484 9.6 Vietnam 19 467 2 +2.7 Indonesia 9 129 8 25 9.6 Colombia 8 523 7 8 8.5 Ethiopia 7 5 6 5 13.3 Peru 4 69 5 443 +33.8 India 5 33 5 333 +6. Honduras 4 326 4 5 +4. Mexico 4 85 4 3 11.3 Guatemala 3 95 3 75 5.1 Production in ASEAN countries in 211/12* (Volume in bags % of world production) Robusta % in World Arabica % in World Indonesia 6 518 13.% 1 733 2.2% 2% Laos 583 1.2%.% Philippines 34.7% 11.% Thailand 85 1.7%.% Vietnam 19 37.8% 1 1.2% Sub total 27 29 54.3% 2 743 3.4% World total 5 291 8 87 *Estimated 4
World Production Robusta (average of period) Volume (million 6 kg bags) Growth rate in over the previous period % in World total 1965/66 1979/8 17.1 24.3% 198/81 1989/9 22.4 3.1% 24.9% 199/91 1999/2 3.5 36.2% 3.3% 2/1 211/12 44.8 46.9% 37.3% Total exports to all destinations Calendar years 2 to 211* 11 14.2 1 96.3 97.5 96.2 96.9 9 89.6 91.11 91.6 9.99 88.8 87.6 86.4 8 7 million bags 6 5 4 3 2 1 2 21 22 23 24 25 26 27 28 29 21 211 *Provisional 5
Exports by group and by type of coffee October to April ( bags) 21/11 211/12 Change Total 62 829 6 299 4.% 4 Colombian Milds 6 31 4 996 2.8% Other Milds 14 334 14 8 3.3% Brazilian Naturals 2 643 17 814 13.7% Robustas 21 541 22 689 5.3% Arabicas 41 288 37 611 8.9% Robustas 21 541 22 689 5.3% Value of exports to all destinations Calendar years 2 to 211* 27 24 24.3 21 billion US dollars 18 15 12 1.8 12.8 15.4 13.3 16.7 9 8.2 9.3 69 6.9 6 5.4 5.2 5.6 3 2 21 22 23 24 25 26 27 28 29 21 211* *Estimated 6
Opening stocks in exporting countries Crop years 1964 to 211* 1 9 85.8 8 81. 8.2 7 7.7 68.1 71. 64.5 64. 63.5 milhões de sacas 6 5 4 3 53.8 53.8 55.1 54.9 52.4 52. 49.5 48.2 44.8 45.3 42.6 4.3 32.6 32.7 34.6 29.6 3.5 55.8 54.2 53.1 53.5 52.2 47.4 44.2 42.2 4. 41. 55. 54. 52.8 48.3 41.1 37. 28.4 27.3 2 2.5 19.2 18.7 17.6 1 Inventories in importing countries End of calendar year 1964 to 211* 25 22.4 2 18.1 19.3 21.1 21.4 2.3 2.1 2.2 2.1 19.1 18.6 19.2 18.4 16. 16.1 16.1 15 14.8 million bags 12.6 11.6 1.5 9.8 1 8.8 9. 9.2 9.3 9.3 8.4 7.9 8.2 8.5 7.8 7.8 7.9 7.5 7.5 6.6 6.8 63 64 6.1 6.3 6.1 6.4 5.6 5.7 5 1.5 9.3 8.4 8.2 7.7 7
World stocks/consumption ratio 1964 to 211* 1.6 1.4 1.2 1..8.6.4.2. World consumption Calendar years 2 to 211* 15 14 13 12 11 15.5 19.8 111.4 113.9 12. 12.8 124.8 129.3 133. 132.2 135.7 137.9 1 9 million bags 8 7 6 5 4 3 2 1 2 21 22 23 24 25 26 27 28 29 21 211* 8
World consumption 2 211 (in s of 6kg bags) Change (211 2) Period growth 2 211* Volume % rate (%) Traditional markets 63 589 7 771 7 182 11.3 1. Producing countries 26 383 42 412 16 29 6.8 4.4 Emerging markets 15 524 24 717 9 193 59.2 4.3 World total 15 496 137 9 32 44 3.7 2.5 Consumption: traditional markets ( bags) Annual 2 211* growth rate TOTAL 63 589 7 771 1.% USA 18 746 22 43 1.5% Germany 8 77 9 46.7% Japan 6 626 7 15.5% France 5 42 5 959.9% Italy 5 149 5 689.9% Spain 2 991 3 149 5%.5% United Kingdom 2 342 2 926 2.% Poland 2 46 2 42.% Sweden 1 173 1 125.4% Austria 875 1 117 2.2% 9
Changes in retail prices of roasted coffee (in national currency) % change from previous year Calendar year Importing country 29 21 211 28 211 Belgium.8 9.6 19.8 3.2 Denmark.2 15. 2.9 38.8 Finland 1.5 27.2 22.5 58.2 France 3.4.7 11.2 15.8 Germany 3.8 9. 2.9 16.5 Italy.7.7 16.6 18.2 Spain 2.4 1.2 12.1 1.8 Sweden 7. 15.2 2.3 48.3 United Kingdom 1/ 5.1 3.9 16. 26.7 Japan 2.4 1.6 22.7 7.1 Norway 13.2 8.9 23.4 52. USA.6 13. 31.1 47.3 1/ Soluble coffee Estimated consumption: 1 leading markets by volume 21 211* % million bags change World total 135.7 137.9 1.6 USA 21.78 22.4 1.2 Brazil 19.7 19.57 2.6 Germany 9.29 9.46 1.8 Japan 7.19 7.1 2.5 France 5.71 5.96 4.3 Italy 5.78 5.69 1.6 16 Russian Federation 3.66 3.69.9 Canada 3.59 3.57.3 Spain 3.23 3.15 2.6 United Kingdom 3.13 2.93 6.7 1
Consumption: producing countries ( bags) 2 211* period growth rate (%) Total 26 383 42 412 +4.4 Brazil 13 75 19 573 +3.7 Ethiopia 1 938 3 383 +5.2 Indonesia 1 664 3 333 +6.5 Mexico 1 189 2 354 +6.4 Philippines 841 2 15 +8.9 India 938 1 763 +5.9 Others 6 738 8 857 +3.5 Consumption: emerging markets 2 211* Annual growth rate Total 15 524 24 717 4.3% Russian Federation 1 863 3 695 6.4% Korea, Rep. of 1 246 1 81 3.4% Algeria 1 779 1 789.1% Australia 832 1 46 4.9% Ukraine 178 1 324 2.% Romania 551 82 3.5% Turkey 287 633 75% 7.5% South Africa, Rep. of 368 538 3.5% Israel 287 512 5.4% Lebanon 273 47 3.7% New Zealand 186 243 2.5% 11
World consumption Calendar years 197 to 22* 2 18 16 172.8 164.66 156.7 Million bags 14 12 1 8 197 1979 1.3% 198 1989 1.7% 199 1999 1.8% 2 21 2.5% 6 4 2 Actual Low 1.5% Medium 2.% High 2.5% *Estimated ASEAN Countries : Challenges 1 Need to strengthen support services / capacity building Strengthen research: coffee genome, biodiversity conservation, development of new varieties, carbon sequestration Implement adaptation and mitigation strategies to offset climate change and other adverse effects of weather Improve labour productivity, esp. harvesting techniques Renew ageing tree population (esp. Vietnam) 12
ASEAN Countries : Challenges 2 Increase yields without increasing land area Improve access to financial services (credit & risk management) Social sustainability: empower women & attract youth Value addition: Differentiation (quality, certification, geographical indications etc.) Industrialization Sustainability: certification / verification ASEAN Countries: Opportunities Favourable demographics: Large populations / rising middle class / young population grow internal market 13
Consumption and per capita consumption in selected countries 211* Consumption ( bags) Per capita (kg) Finland 1 93 12.26 Germany 9 46 6.92 Brazil 19 573 6.1 USA 22 43 4.16 Australia 1 47 3.92 New Zealand 243 3.4 Japan 7 15 3.31 Korea, Rep. of 1 81 223 2.23 Laos 15 1.4 Philippines 2 15 1.38 Vietnam 1 583 1.7 Indonesia 3 333.86 Thailand 5.44 ASEAN Countries: Opportunities Favourable demographics: Large populations / rising middle class / young population grow internal market Proximity to major emerging markets Demand for soluble coffee in emerging markets 14
Consumption by continent ( bags) ( bags) Annual Change growth 2 211 (volume) rate Africa 6 7 8 55 2 48 2.7% Asia & Oceania 15 147 23 26 8 6 4.% Europe 42 799 52 236 9 437 1.8% Latin America 2 42 28 786 8 366 3.2% North America 21 123 25 617 4 494 1.8% World 15 496 137 9 32 44 2.5% Role of ICO Knowledge based organization to help create an enabling environment for the sustainability of the world coffee sector NOT market regulator (no economic clauses) standard setting body ( ISO) forum for int l trade negotiations ( WTO) 15
ICO Activities Forum for international cooperation Coffee development projects Economics Statistics Promotion Quality and food safety Coffee and health Information services Seminar on the economic, social and environmental impact of certification on the coffee supply chain (1) Date: 25/Sep/212 Topics: costs, benefits and economic, social and environmental impacts of certification/verification schemes, especially for smallholder farmers; impact of certification on productivity, cost management, incomes, health, education, farmer training, biodiversity and soil fertility; consumer and industry demand for certified/verified coffee and related demand drivers; access to credit and finance for certification/verification processes and the production and promotion of certified/verified coffee; 16
Seminar on the economic, social and environmental impact of certification on the coffee supply chain (2) Date: 25/Sep/212 Topics: impact of certification/verification on value at the various levels in the coffee supply chain, for example, price premiums for producers and other supply chain participants, and means to enhance transparency about such value/premiums; similarities and differences, as well as possible synergies, among certification/verification schemes; the relationship between certification/verification schemes and relevant international standards; certification/verification schemes and their impact on trade; traceability; Seminar on the economic, social and environmental impact of certification on the coffee supply chain (3) Topics (cont.): impact of certifications/verifications on the volatility of coffee prices; the role of certifications in times of low coffee supply; certification/verifications as a marketing strategy; lessons learned on the impact of certification/verifications on improving long term sustainability; and improving the efficiency and cost effectiveness of certification/verifications. 17
Thank you www.ico.org José Sette Head of Operations 18