UK

The London-based International Coffee Organization (ICO) is looking at ways to enhance coffee inventory levels in producing nations. The intention is to prevent major suppliers from ‘dumping’ coffee on the market that might trigger a decline in prices.

"While coffee consumption has certainly risen from 102-104 million bags in the early 2000 to about 130 million bags in 2008, inventory in producing nations has slipped from the usual level of 35-40 million bags to about 15-17 million bags," according to Nestor Osario, ICO executive director. "We have seen instances where the producing nations keep supplying into the market, which impacts coffee prices."

ICO is also working on funding strategies for small coffee farmers in producing nations such as India to provide access to cheap funding allowing not only regular maintenance of existing coffee trees but also enabling investment in replanting as necessary.

"The rising cost of inputs, notably fertilizers, and a depreciating dollar are adding to the grower’s woes," according to Osario.

"The rally in global coffee prices in 2008 and early 2009 was led by a decline in output, notably from Colombia, where output fell by three million bags, and other Central American nations," Osario said. "The rally could not be sustained as both Brazil and Vietnam resorted to higher exports with the former selling in excess of 30 million bags."

According to Osario, India could soon overtake Mexico to become the world’s fifth largest coffee producer. ICO estimates Mexico produced 4.65 million bags of coffee in 2009, compared to India’s 4.372 million bags.