There are more people drinking coffee now more than ever and that doesn't bode well for the global supply of beans. Bloomberg is reporting that a spike in the coffee consumption of emerging markets could lead to a shortage of beans in the next few years.
The report says that in order to combat this, the world will need to find another coffee producer on the scale of Brazil, which is the top grower and exporter at the moment. An additional 40-50 million bags of coffee beans must be produced in the next decade to keep up.
Andrea Illy, Chairman and CEO of Italian coffee giant Illycafe SpA tells Bloomberg:
"Sooner or later, in months or years, we'll have to make a bold decision about what to do. We don't know where this coffee will come from."
The effects of this shortage is already being felt now. A shortage of 3.5 million bags is expected to hit the market in the upcoming 2015-2016 season. This comes on the heels of last year's 6.4 million bag deficit.
Aside from the growing demand, climate change has also played a key factor in the lack of beans. A recently released report from Indonesia-investments.com details the effects of El Nino on the country, which is the world's fourth largest producer.
'Australia's Bureau of Meteorology believes that El Nino is to peak around the end of 2015, while Carlos Mera, analyst at Rabobank International, said El Nino-related drought will specifically impact on coffee plantation areas in South Sumatra, one of Indonesia's key coffee growing regions.'
If October continues to be mired in drought, Indonesian farmers are expecting the upcoming harvest to yield over 7% less than previous years. Climate change has also affected many Central and South American coffee nations.
