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Coffee Industry Forecasts Higher Demand in 2020/2021

Sales to coffee shops and office workers fell dramatically as more people were forced to stay home. Schluter, also a founder member of the speciality coffee association, SCAE, says that now that Brazil has offloaded most of its huge stock, supply to the market will drop next month and hopefully, lead to an increase in prices.
01 Oct 2020 17:00

Audio 2

The global coffee industry projects that the business will rise out of the effects of the COVID-19 pandemic earlier than expected, after noticing that consumption was not as badly hit as previously predicted.  

Global consumption is estimated to have risen by 0.3 per cent to 168.39 million bags in the coffee year ended September 30, 2020. And because there was an increase in the supply, the industry also recorded an estimated surplus of 952,000 bags.  All group indicator prices rose in August 2020 for the second consecutive month with the largest increase occurring for Brazilian Naturals.

In the first ten months of the coffee year 2019/20, global exports reached 106.59 million bags, 5.3 per cent lower than the same period in 2018/19, while world coffee production is estimated at 169.34 million bags in 2019/20, 2.2 per cent lower than last year.

There was a high increase from Brazil, the largest producer and exporter with volumes amounting to 60 million bags, while Uganda, Africa's largest exporter also exported about 5 million bags for the first time. This and the disruptions in the market due to the pandemic led to a slight reduction in prices, according to the International Coffee Organisation.

While farmers and exporters found issues with transportation due to closed borders, the lockdowns in exporter markets also saw the markets disrupted. Philip Schluter, the managing director of UK Based Schluter Coffee, says during the three months of lockdown in the main markets, there was a shift in consumption, with consumers buying coffee from supermarkets for consuming at home.

Sales to coffee shops and office workers fell dramatically as more people were forced to stay home. Schluter, also a founder member of the speciality coffee association, SCAE, says that now that Brazil has offloaded most of its huge stock, supply to the market will drop next month and hopefully, lead to an increase in prices.

He, however, urges Uganda to maintain or improve the standard of her export and increase its visibility on the market, pledging to buy as much of it as he can.

//Cue in;  "Uganda has more…   

Cue out…not dropped drastically.”//                           

Uganda has been steadily increasing production and exports over the last four years and hopes to hit 20 million bags per year between 2025 and 2030, according to the national coffee roadmap.

The growing output is attributed to the replanting campaign that started seven years ago, with the first crop maturing. The stakeholders think that with the economies emerging from the worst effects of the pandemic, demand will increase this year.170 million bags.  

A top Ugandan coffee farmer, Robert Waggwa Nsibirwa also projects that local production will also be good, considering that the weather has so far been good in most producing areas of Uganda. 

  //Cue in; I’ve been in the…

Cue out…a very good production."//

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