LONDON – Britain signed a key global coffee sector agreement aimed at tackling some of the industry’s most pressing issues, including making coffee growing and coffee consumption more sustainable.
Food and farming minister Mark Spencer signed the ‘International Coffee Agreement (ICA) 2022’, the Environment, Food and Rural Affairs Department said in a joint statement with the International Coffee Organisation (ICO) and the British Coffee Association (BCA).
The agreement for the first time gives private sector players like roasters and farmers a more prominent role, alongside national governments, in driving the global coffee sector’s sustainability initiatives.
“This international treaty champions the industry globally, and I hope the UK can help continue its drive for new standards of sustainability for our coffee,” said Spencer.
The first ICA was signed between producing and consuming countries in 1962, with the aim of regulating global coffee prices via the use of production quotas.
It later collapsed, prompting a move to freely traded markets that have kept prices mostly low, farmers facing poverty and sustainability efforts impaired.
The global coffee supply balance in the 2023/24 season is expected to be nearly balanced between production and consumption as the Brazilian crop will grow only slightly this year, a report said last month.
Dutch bank Rabobank now sees a small surplus of only 1.6 million 60-kg bags in the global 2023/24 coffee supply balance, down from a previous estimate of 4 million bags. It sees Brazil’s 2023 crop at 67.1 million bags compared to 63.2 million bags in 2022.
Carlos Mera, head of research for agricultural commodities, said in the report that despite general worries about demand, that is still expected to increase, although at smaller rates.
The report sees an increase of 1.6 percent globally, “well below the typical 2.3 percent annual growth rate seen in the two decades before the Covid-19 pandemic”.
A separate report from the bank a day earlier confirmed a fall in sales by volumes from some of the leading coffee companies in the United States, the world’s largest consumer, after sharp price increases.
Rabobank expects Colombia’s production to recover from a poor 2022/23 season when the country – the second largest arabica coffee producer – harvested only 11.8 million bags. It sees Colombian coffee output at 14 million bags in 2023/24.
Vietnam’s crop is expected to grow 500,000 bags to 29.5 million bags in 2023/24. The Asian country is the number 1 producer of robusta, the type widely used to make instant coffee.
Total global demand for coffee in 2023/24 was pegged at 173.2 million bags, while production was projected at 174.8 million bags. — Reuters
