Consumers will abandon cafes to drink coffee at home amid rising inflation: ICO

Coffee consumption will fall in shops and restaurants to rise in homes due to global inflation and the risk of a recession, in a market with more demand than supply and low inventories, the executive director of the International Coffee Organization said on Friday. Coffee (OIC), Vanusia Nogueira.

despite the good international coffee prices in recent months, world supply has still not been able to meet demand at a time when inventories are scarce, said Nogueira, who attributed the lower harvest to climate change that has hit the main producing areas of the world.

“We have many climatic problems in the strongest producing regions. Unfortunately for many of our producers, because they are being affected by climatic changes, the price may be high, but they do not have product to deliver,” said the ICO Executive Director in an interview with Reuters on Bogota.

“Without water there is no flowering, there is no fruit, with a lot of water the fruit does not ripen, so we have more demand than supply with very low inventories around the world, below consumption,” explained the expert who said that, although an increase in the harvest is expected Brazilthe trend will not change.

Total production for coffee year 2021/22 reached 167.2 million bags, down 2.1% from 170.83 million bags in the previous coffee year, according to ICO statistics. World coffee consumption increased by 3.3% to 170.3 million 60-kilo bags in coffee year 2021/22.

Nogueira foresaw stability in coffee prices by 2023, assured that the weather will influence the harvest, mainly in large producers such as Brazil and said that as it happened in the midst of the Covid-19 pandemic, consumption will move to homes and will drop in cafeterias and restaurants.

“We should have prices more or less at this level for a while. I don’t see these prices going up because we are reaching the ceiling for the industry,” he said.

In the middle of the high headline inflation and fears of economic recession, the expert foresaw stability in sales and consumption volumes, but a change in the way coffee is consumed with a lower quality product.

“I don’t think there will be an impact in terms of volumes, but in the way coffee is drunk and in quality, people are going to lower the quality of what they drink and the form of consumption, they leave the street and go home,” he said, warning that those most affected could be the producers of specialty coffees.

Nogueira admitted that climate change is the main challenge for the industry and that they are currently working on the creation of a coffee resilience fund with the support of foundations and banks to increase research, map production areas and improve varieties of coffee trees to resist climate variations.

The executive director of the OIC revealed that progress is being made in the signing of a new agreement to incorporate the organization into the private sector, non-governmental organizations and civil society in search of guaranteeing prosperity for producers.