Coffee Market Outlook - International Coffee Organizationdev.ico.org/news/vietnam_1209.pdf · India 938 1 518 5.50 Others 7 098 9 444 3.22 World coffee consumption: Emerging markets

1

Coffee Market Outlook

15th Asia International Coffee ConferenceHo Chi Minh City, Vietnam

7 9 D b 2009

International Coffee Organization - www.ico.org

7-9 December 2009

Néstor Osorio

Executive Director

ICO composite indicator price Monthly: January 2000 to November 2009

130

140

150

70

80

90

100

110

120

US

cent

s pe

r po

und


30

40

50

60

2

ICO group indicator pricesDaily: 1 October 2008 to 30 November 2009

210

220

230

240

100

110

120

130

140

150

160

170

180

190

200

US

cent

s pe

r po

und


50

60

70

80

90

Colombian Milds Other Milds Brazilian Naturals Robustas

World ProductionCrop years 2000 to 2009

113.4

122.6

115.9

111 2

129.1

118.9

128.1123.0-125.0

120

140

107.9104.7

111.2

60

80

100

mil

lion

bag

s


0

20

40

2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09* 2009/10*

3

Total production in 2008/09

Africa11% Asia&Oceania

13%Colombia

7%

Vietnam14%

7%


Central America + Mexico

14%South America4%

Brazil37%

Production by type of coffee Crop year 2008/09

Robusta49.539%


Arabica78.661%

4

Production in VietnamCrop years commencing 1990 to 2009

19.3

18.1

17.518

21

6.9 7.0

11.6

14.9

13.1

11.6

15.2

14.213.5

16.5

9

12

15

mil

lion

bag

s


1.4 1.3

2.3

3.03.5

3.9

5.7

0

3

6

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

Production: 10 leading producers 2008/09 (Volume in 000 bags - % of world production)

Brazil 45 992 36.8

Vietnam 18 500 14.4

Indonesia 9 350 7.5

Colombia 8 664 6.9

Mexico 4 650 3.7

India 4 372 3.5

Ethiopia 4 350 3 5


Ethiopia 4 350 3.5

Peru 3 872 3.1

Guatemala 3 785 3.0

Uganda 3 200 2.6

5

Total exports to all destinationsCalendar years 2000 to 2009*

86.8 87.885.6

87.584.9

88.1

93.3 93.595.7

90

95

100

105

83.584.9

35

40

45

50

55

60

65

70

75

80

85

mil

lion

bag

s


0

5

10

15

20

25

30

35

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

Value of coffee exportsCalendar years 2000 to 2009*

15.316

18

8.2

5 4 5.6

6.9

9.3

10.8

12.8

13.6

6

8

10

12

14

billi

on U

S do

llars


5.4 5.2

0

2

4

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

6

World consumption Calendar years 2000 to 2009

112 8

118.5 119.0122.6

127.1130.0 132.0

120

140

104.7109.0 110.5

112.8

60

80

100

mill

ion

bags


0

20

40

2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009*

Estimated consumption in 2008: 10 leading markets by volume

(in million 60-kg bags)

USA 21.7

Brazil 17.9

Germany 9.6

Japan 7.1

Italy 5.9

France 5.1


Russian Federation 3.7

Spain 3.5

Indonesia 3.3

United Kingdom 3.1

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Consumption per capita: top 10 leading markets by volume

(in kg (green equivalent) per year)

Finland 12.6

Switzerland 9.1

Norway 9.0

Sweden 8.3

Iceland 8.3

Denmark 7.7


Germany 7.0

Estonia 6.9

Austria 6.5

Bosnia & Herzegovina 6.2

World consumption in 2008(in million 60-kg bags)

Africa6.95% Asia&Oceania

20.115%15%

Central America + Mexico

4.84%

Europe50.139%


North America25.820%

South America22.217%

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World coffee consumption Evolution 2000 – 2008

(in thousand 60-kg bags)

A l2000 2008*

Annual growth (%)

Traditional markets 63 377 68 584 0.88

Producing countries 25 604 35 855 3.81


Emerging markets 15 744 25 565 5.53

WORLD TOTAL 104 725 130 004 2.43

World coffee consumption: Traditional markets Evolution 2000 – 2008


A l2000 2008*

Annual growth

Total 63 377 68 584 0.88European Community 38 005 39 867 0.53

Germany 8 770 9 554 0.96Italy 5 149 5 937 1.60France 5 402 5 154 -0.52


Spain 2 991 3 485 1.71United Kingdom 2 342 3 067 3.04

USA 18 746 21 652 1.61Japan 6 626 7 065 0.72

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World coffee consumption: Producing countries Evolution 2000 – 2008


2000 2008*

Annual growth

(%)Total 25 604 35 855 3.81Brazil 13 075 17 526 3.31Indonesia 1 664 3 333 8.03Mexico 1 189 2 200 7.08


Ethiopia 1 642 1 833 1.23India 938 1 518 5.50Others 7 098 9 444 3.22

World coffee consumption: Emerging markets Evolution 2000 – 2008


Annual growth

(%)

Emerging markets 15 744 25 565 5.53

Russian Federation 1 863 3 716 7.97

Algeria 1 779 2 118 1.96

Ukraine 179 1 733 28.71

K R bli f 1 246 1 665 3 28

2000 2008*


Korea, Republic of 1 246 1 665 3.28

Australia 832 1 145 3.61

China* 859 940 1.01

Others 8 986 14 248 5.26

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Opening stocks in exporting countriesCrop years 2000/01 to 2008/09

55.154.0

52.7

60

48.3

41.2

37.1

28.3

25.3

17 320

30

40

50

mill

ion

bags


17.3

0

10

2000 2001 2002 2003 2004 2005 2006 2007 2008

Inventories in importing countries End of June: 2000 to 2009

23

25.9

25

30

15.5

18.8 18.7

21.1 21.1

23.5

19.5

22.2 22.1

10

15

20

5

mill

ion

bags


0

5

Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09

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Outlook 2009/10: Supply 1

Production costs Production costs

– Steady growth in recent years

– Prices of main inputs(fertilizers + petrol) oscillating


– Labour costs remain high

Outlook 2009/10: Supply 2

Influence of exchange rates:In co ntries ith e change rates linked to the– In countries with exchange rates linked to the US$, price to producer has kept pace with recovery since 2004

– Vietnam: benefits of exchange rate linked to US$ off-set by high inflation 5% devaluation in Nov/2009


in Nov/2009

– In countries with flexible exchange rates (esp. Brazil and Colombia), appreciation of local currency in relation to the US$ reduces benefit of higher coffee prices since 2004

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Outlook 2009/10: Demand 1Traditional markets

58% of world consumption p

Changes in consumption habits

(downtrading):– From outside the home to at home

– Greater demand for lower-priced brands


Impact on total volume of consumption likely to be limited

Outlook 2009/10: Demand 2Producing countries

26% of world consumption Stable domestic prices

Impact on total volume of consumption likely to be limited


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Outlook 2009/10: Demand 3Emerging markets

18% of world consumptionp

Vulnerabilities:– Coffee continues to be considered a luxury item

– Devaluation of local currencies vs. US$ increases price to consumer

M i k ( l t


– Macro-economic weaknesses (unemployment, lack of credit) can reduce demand

Impact on total volume of consumption still uncertain

Outlook 2009/10: Prices

Short term:– Low production in Colombia and Central AmericaLow production in Colombia and Central America

increased differentials for Washed Arabicas

– Market strongly influenced by exogenous factors (stock markets, exchange rates)

Medium term:– Market influenced by expectations regarding Brazilian


production for 2010/11

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World Coffee ConferenceGuatemala, 26-28 February 2010


g g{tÇ~ çÉâ


www.ico.org

Documents

Coffee Market Outlook - International Coffee Organizationdev.ico.org/news/vietnam_1209.pdf · India 938 1 518 5.50 Others 7 098 9 444 3.22 World coffee consumption: Emerging markets