Kochi, Aug. 11 The world coffee trade is beginning to see signs ofslowdown in some emerging markets imports. The slowdown is attributed to rising prices and uncertainty over demand.
Consequently, India’s exports during January 1-August 6 fell by 31,996 tonnes to 1,20,141 tonnes against 1,52,137 tonnes in the corresponding period last year, according to India Coffee Board.
Consumption
However, growing consumption in coffee growing countries such as Brazil and India and in some emerging markets has kept the world consumption buoyant at an estimated 128.5 million bags (of 60 kgs each) in 2008 compared with 127 million bags in 2007, despite the economic crisis.
For 2009, consumption in the traditional markets of North America, Western Europe and Japan is believed to be relatively stable, said International Coffee Organization.
According to the ICO, average per capita consumption figures for 2008 indicate that Brazil is the only exporting country with a relatively high level of coffee consumption.
Price correction
In the case of importing countries, excluding Luxembourg, the 10 countries with the highest consumption levels are: Finland (12.62 kg per capita), Switzerland (9.15), Norway (8.99), Sweden (8.29), Denmark (7.71), Germany (6.97), Estonia (6.89), Austria (6.53), Italy (5.98) and Canada (5.80). Per capita consumption in 2009 is likely to reflect the impact of the economic crisis, since import figures for the emerging markets already indicate a slight downward trend. The ICO said prices for all four groups of coffee were subject to downward corrections during June, even though supplies of Colombian Milds and Other Milds from Central America remained relatively tight.
The ability of the industry to substitute other origins contributed to a slackening in the upward pressure on market prices so that the differentials between prices of Colombian Milds and the other groups were down. This downward trend may also indicate that market participants consider that the critical risk period for frosts during the winter season in Brazil is over and that the summer in the Northern hemisphere, traditionally a season of slack demand, has arrived.
After reaching 131.24 US cents per lb on June 1, the ICO composite indicator price was down to 112.17 cents on June 30, a fall of 14.5 per cent in one month. The monthly average of the ICO composite indicator price fell by 3.3 per cent, from 123.05 US cents per lb in May to 119.05 US cents per lb in June.
The differential between prices of Colombian Milds and the New Yorkfutures market narrowed down from 80.62 US cents per lb in May to 66.93 US cents per lb in June, a fall of 17 per cent.
Total exports in May 2009 remained at the same level as in May 2008 at 8.2 million bags bringing the cumulative total for the first eight months of the coffee year (October 2008 – May 2009) to 65.7 million bags (63.8 million bags), an increase of 3 per cent.
A fall in exports of Colombian Milds and Other Milds was offset by a rise in exports of Brazilian Naturals and robustas, ICO added.
Source : Business Line