Surge in Cost Fails to Dampen Demand for Coffee

One of the more newsworthy events in coffee's recent history has been the more than doubling of the cost of coffee in the past year and how that increase in cost has not led to a decline in the demand for coffee worldwide. Global coffee consumption rose 2.4 per cent in the past year. And that trend is expected to continue, according to the International Coffee Organization.

"There's no impact (from high prices) in terms of a reduction in demand. Demand is still very dynamic," ICO Chief Economist Denis Seudieu said to the Reuters News Agency earlier this month.

"We base our estimates on what's happened in the last 10 years and the average growth is 2.5 per cent per annum. We think that trend will continue."

According to one German trader, "rising futures are largely being absorbed by roasters because retailers will not accept price rises." There exists already in most mature markets fierce competition between retailers that tends to keep prices for coffee down, according to the news story.

Scandinavian countries are the world's top coffee drinkers on a per capita basis, with Finland (not Norway, as was previously reported on this site) leading the pack. The United States and Brazil are the worlds biggest coffee consumers, in absolute terms.

Coffee remains big business. China and India in particular are seen as being responsible for the ongoing increase in worldwide coffee demand. Starbucks is planning to more than triple the number of its cafes in mainland China from 450 currently to 1,500 by 2015. In India, the rise in coffee costs has failed to deter customers wishing to buy it, although some companies have begun using the cheaper robusta coffee instead of the arabica variety in some of their blends.