Global demand for coffee is on the rise while supply is in decline due to global warming. In fact, just to keep pace with demand, the world will need another Brazil. The rising consumption in emerging markets means that an additional 40-50 million bags of coffee need to be produced in the next decade, Bloomberg reported.
The Global Coffee Forum in Milan tried to shed light on the situation. "Sooner or later, in months or years, we'll have to make a bold decision about what to do," said Andrea Illy, Chairman and CEO of Illycafe SpA, a roaster based in Trieste, Italy, in an interview on Wednesday. He added, "We don't know where this coffee will come from."
For this year, a coffee production deficit of 3.5 million bags started this week. Last year, a shortage of 6.4 million bags was recorded. If think tanks are correct, then global coffee consumption will balloon to 200 million bags by 2030 and that is cause for alarm for producers already feeling the effects of climate change.
Climate change threatens Brazil's output, as well as that of El Salvador, Nicaragua, and Mexico. In fact, last year, Brazil's crop losses resulted in a 50% increase in Arabica futures in New York, Live Trading News reported. The dive of the Brazilian currency at the start of the year, however, made South American Arabica attractive again. Companies like Starbucks use premium Arabica in their blends.
Rising temperatures are a serious cause of concern as Arabica coffee is sensitive to temperature changes. Brazil is the world's foremost producer of Arabica beans. Vietnam, on the other hand, is the world's top producer of Robusta beans which, as the name implies, is more resilient than Arabica, Eater reported.
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