The next wave of growth in international coffee industry will come from Asia, and India is expected to play a lead role in driving this growth, says the International Coffee Organization (ICO), a London-based body set up under the auspices of the United Nations in 1963 to highlight the economic importance of coffee.
Major chunk
Jose Dauster Sette, executive director, ICO, said Asia’s coffee production had almost doubled in recent years from 16-32% with Vietnam and India contributing a major chunk. Also, most Asian countries are reporting a 5% increase in the consumption of the beverage, while it is 6% in India. Coffee consumption is growing at 1-2% levels across South American and African countries and also in consuming geographies like the U.S., Russia and Europe.
ICO has conducted a comprehensive stakeholder consultation study to understand the problems of coffee industry and also to find ways and means to get coffee farmers out of deep distress and debt.
“We have tried to understand the root cause of the problem and identified some 50 solutions. But there is no one super bullet that can kill the pain of coffee farmers, because the challenges they face are too many and too deep,” said the ICO top executive.
According to Mr. Dauster Sette, private sector can do something, governments need to do their bit, and bodies like ICO have their part to play to get over 25 million coffee farmers around the world, including over 350,000 in India, out of red who are not even getting a price to cover their cost of production.
“ICO has been trying to coordinate and bring all stakeholders to a dialogue point. We hope that we can help enhance transparency in the global coffee market by providing good statistics and analysis of the overall situation.”
Global coffee roasters and retailers were willing to participate in the dialogue, but contribution to farmers’ relief was still not clear, he said.
“Roasters and retailers are doing something for the farming community, but that’s insufficient. I don’t think there will be any direct intervention of roasters and retailers in terms of setting a floor price for coffee. There are anti-trust considerations, therefore decisions have to be taken on board level and then there are political obstacles too,” he explained.
Who makes money in coffee?
Who actually makes most of the money in the coffee chain was the biggest and toughest question remained unanswered, as most of these numbers are held in private hands and it is difficult to know who is holding what, Mr. Dauster Sette further said.
“Roasters say they live in a highly competitive environment, which is getting more concentrated with mergers and acquisitions. They say they don’t set the price, but retailers do and they earn profits. Retailers like Starbucks say, most of the coffees are sold not in cafes but in super markets.”
So, the price factor still remains an enigma, though everyone knows who makes the most.
India will host the fifth edition of The World Coffee Conference between September 7 and 12, 2020, in Bengaluru. The earlier WCCs were held in London, Guatemala, Brazil and Ethiopia.
