Coffee shortage looming large as global consumption zooms but production plummets

The world is staring at a coffee shortage on the back of exponentially rising consumption and shrinking production. This will be further exacerbated by the ill-effects of climate change that will widen the supply gap. According to an expert, the world will need one more Brazil to sustain the supply of coffee. Brazil is world’s top grower and exporter of coffee beans.

Future projections on global coffee consumption say it will touch 200 million bags by 2030. This was stated by Michael R. Neumann, chairman of Hanns R. Neumann Stiftung, a foundation affiliated with Hamburg-based merchant Neumann Kaffee Gruppe.

There has been conspicuously high consumption of coffee in emerging markets. To ward off coffee shortage, the global production need to rise by an additional 40 million to 50 million bags in the next 10 years, said Andrea Illy, the chief executive officer of Illycafe SpA, based in Trieste, Italy. That will be more than the entire crop of Brazil, Bloomberg reported.

Supply constraints

The expansion of global coffee output is throttled by two factors: rising challenges of climate change and low farm prices. Low price is discouraging farmers from increasing output and supply.

In Brazil, climate change is threatening a quarter of its output. Similarly, growers in Nicaragua, El Salvador and Mexico are also facing potential losses, according to International Center for Tropical Agriculture.

Global Coffee Forum

The Global Coffee Forum held in Milan on Sep. 30 discussed the burning issues facing the coffee sector. The forum attracted participation from producers, government officials and industry representatives. It also observed Oct. 1 as the first international coffee day.

In the current coffee season, the expected production deficit will be 3.5 million bags. According to Volcafe, Winterthur, Switzerland-based merchant, this a bit moderate than the previous season when there was a global shortage of 6.4 million bags.

Experts warns of crop loss

Global warming will be the biggest threat to all coffee growers. It will bring “significant loss” to coffee production, warned leading climatologist Jeffrey Sachs. He called for a mass data collection to help the sector to cope with the damage.

“Climate change is going to reduce production in this sector,” said Dr Sachs, director of the Earth Institute at Colombia University and an advisor to U.N general secretary Ban Ki-moon.

The expert said the warmer trend of temperatures, which made 2015 the hottest since 1879, will “have a direct effect on crop production” particularly the coffee sector.

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