PART III
SECTION E Key findings • Coffee year 2019/20 is a year of unprecedented challenges. Global coffee prices have trended downwards since November 2016 when the ICO composite indicator averaged 145.82 US cents/lb. The covid-19 pandemic presented an unprecedented joint supply and demand shock to the global coffee sector. Global output in 2019/20 is estimated at 169.34 million bags, 2.2% lower than in 2018/19. • Covid-19 has affected labour supply in a number of countries, either directly, due to illness, or indirectly, as government measures have restricted the movement of farm labourers and migrant workers. However, much of the supply for coffee year 2019/20 was unaffected by covid-19 as harvesting in most countries had already concluded by the time the pandemic occurred. • Global coffee consumption is estimated to rise by 0.3% to 168.39 million bags in 2019/20. There was a surge in demand at the start of the pandemic as a result of panic-buying and stockpiling. However, consumption in the remaining months of the coffee year is estimated downwards due to ongoing pressure from a global economic downturn and limited recovery in out-of-home consumption as countrywide social distancing measures remain in place. • Regional highlights in coffee year 2019/20 are as follows: Africa’s exports have risen. Despite the growth of coffee production in the region, exports from Asia and Oceania declined. After three years of growth, Mexico and Central American coffee production fell. South America’s Arabica production has gone down while Robusta production has increased. Demand for coffee in Europe and North America has fallen after significant growth in the previous year.
Coffee year 2019/20 has been a challenging year for the world coffee sector. Global coffee prices have trended downwards since November 2016 when the ICO composite indicator averaged 145.82 US cents/lb. Further, covid-19, which was declared a global pandemic on 11 March 2020 by the World Health Organization43, presented an unprecedented joint supply and demand shock to the global coffee sector.44 Much of the supply for coffee year 2019/20 was unaffected by covid-19, since harvesting in most countries had already concluded by the time the pandemic occurred. Global output in 2019/20 is estimated at 169.34 million bags, 2.2% lower than in 2018/19. Arabica output is estimated to decrease by 5% to 95.99 million bags while Robusta output is expected to rise by 1.9% to 73.36 million bags. Covid-19 has affected labour supply in a number of countries, either directly due to illness or indirectly as government measures have restricted the movement of farm labourers and migrant workers. The impact of limited supply, however, is more likely to affect the 2020/21 harvest, particularly if there is a resurgence of the pandemic in the Autumn. Yields may also be impacted since labour is used not just in harvesting, but also for maintenance of trees during the growing season. In 2019/20, global coffee consumption is estimated to fall by 0.9% to 167.59 million bags. At the start of 2019/20, global demand for coffee was strong following an increase of 5% in 2018/19 to 167.84 million bags, above the longterm average of 2.1%. There was also a surge in demand at the start of the pandemic as a result of panic-buying and stockpiling. However, consumption in the remaining months of the coffee year is estimated downwards due to ongoing pressure from a global economic downturn and limited recovery in out-of-home consumption as countrywide social distancing measures remain in place. This section provides an overview of the coffee market in coffee year 2019/20. The first part looks at the movement in the international coffee price, as well as trends among the group indicators and volatility. The second part looks at regional production, consumption, and trade and the climatic and socio-political context affecting each region.
See https://www.who.int/dg/speeches/detail/who-director-general-s-opening -remarks-at-the-media-briefing-on-covid-19---11-march-2020. 44 See http://www.ico.org/documents/cy2019-20/coffee-break-series-2e.pdf for a more detailed analysis. 43
THE VALUE OF COFFEE
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Part III: Section E
Market overview 2019/20: A year of unprecedented challenges
