Coffee Prices May Go Up On Rise In Demand
Coffee prices, near a six-year high, may rise as Indians, Indonesians and Mexicans are urged to drink more of the beverage.
Coffee consumption in the three countries, which are among the world’s six largest coffee exporters, may grow more than 25% in the next three years, the International Coffee Organisation (ICO) said.
ICO executive president Nestor Osorio plans to replicate an advertising campaign in Brazil, the world’s biggest exporter, which doubled its coffee drinking.
There will be a “significant,” increase in prices, Christopher Wyke, who helps manage London-based Schroders Plc’s $75 million commodity fund, said. “As producing countries get richer, they use more resources, use more metals, eat more food and drink more coffee,” Wyke said.
The ICO, which is funded by its member countries, plans to start promoting coffee drinking in those countries to balance supply and demand. By curbing the amount of beans exported, it plans to lessen the extent of price swings. The campaigns in India, Indonesia and Mexico start in September.
Schroder’s commodity fund is “likely” to increase its “substantial investment” in coffee because consumption may outpace production in those countries, Wyke said in an interview. “There are constraints on supply in terms of how much land is available to expand coffee production.”
Coffee futures for September delivery fell $12 or 0.9%, to $1,305 a metric tonne on London’s Euronext.liffe exchange as of 1:19 PM local time. Coffee climbed to a six-year high of $1,340 on July 7. It has risen 11% this year.
“We are now working with the governments and institutions in India, Indonesia and Mexico to do something similar,” to the campaign in Brazil, the ICO official said on Wednesday in an interview in London. These three countries are “traditional coffee-producers without a strong coffee-drinking culture.”
India, the world’s second-fastest growing economy with a population of over 1 billion, consumed 1.3 million bags of coffee last year, while its farmers produced 4.4 million bags, according to US Department of Agriculture figures. One bag weighs 60 kg (132 pounds).
The US, the largest coffee consumer, used 20.8 million bags in 2004, according to the international organisation’s data.
Indonesia’s 245 million-strong population drank 2 million bags, while the country produced 6.75 million bags.Mexico, with 107 million people, consumed 1.5 million bags and produced 4 million bags.
—Bloomberg
Coffee consumption in the three countries, which are among the world’s six largest coffee exporters, may grow more than 25% in the next three years, the International Coffee Organisation (ICO) said.
ICO executive president Nestor Osorio plans to replicate an advertising campaign in Brazil, the world’s biggest exporter, which doubled its coffee drinking.
There will be a “significant,” increase in prices, Christopher Wyke, who helps manage London-based Schroders Plc’s $75 million commodity fund, said. “As producing countries get richer, they use more resources, use more metals, eat more food and drink more coffee,” Wyke said.
The ICO, which is funded by its member countries, plans to start promoting coffee drinking in those countries to balance supply and demand. By curbing the amount of beans exported, it plans to lessen the extent of price swings. The campaigns in India, Indonesia and Mexico start in September.
Schroder’s commodity fund is “likely” to increase its “substantial investment” in coffee because consumption may outpace production in those countries, Wyke said in an interview. “There are constraints on supply in terms of how much land is available to expand coffee production.”
Coffee futures for September delivery fell $12 or 0.9%, to $1,305 a metric tonne on London’s Euronext.liffe exchange as of 1:19 PM local time. Coffee climbed to a six-year high of $1,340 on July 7. It has risen 11% this year.
“We are now working with the governments and institutions in India, Indonesia and Mexico to do something similar,” to the campaign in Brazil, the ICO official said on Wednesday in an interview in London. These three countries are “traditional coffee-producers without a strong coffee-drinking culture.”
India, the world’s second-fastest growing economy with a population of over 1 billion, consumed 1.3 million bags of coffee last year, while its farmers produced 4.4 million bags, according to US Department of Agriculture figures. One bag weighs 60 kg (132 pounds).
The US, the largest coffee consumer, used 20.8 million bags in 2004, according to the international organisation’s data.
Indonesia’s 245 million-strong population drank 2 million bags, while the country produced 6.75 million bags.Mexico, with 107 million people, consumed 1.5 million bags and produced 4 million bags.
—Bloomberg
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posted by Colin & Donna-Lee | 11:02 PM
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