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Coffee market watchers are bothered about things more mundane. The yawning gulf between demand and supply, for instance, that is threatening the livelihood of some 25 million coffee farmers across the world. Coffee bean prices have been ruling so low for the past few years that they have been driven to despair. Just a decade ago, coffee prices were soaring---on account of the Brazil Frost that wiped out much of that country's produce. Brazil is still the world's biggest coffee exporter, having sent some 15 million bags (60-kg units) overseas in the July-to-June coffee year 2003-04. The big change since then, however, is the sudden emergence of Vietnam as the second biggest coffee exporter. With over 14 million export bags in 2003-04, this once war-ravaged country has displaced Columbia (10.5 million bags in 2003-04) as the runner-up. Since 1990, Vietnam has planted over a million acres of Robusta coffee, as part of a major World bank-aided project, and the effect on the world coffee scenario has been dramatic. In 2001-02, the global harvest was put at 115 million bags, but demand was just 105 million bags. The glut worsened the following year, with demand falling 15 million bags short of the extra 125 million bags---on rough estimates---grown in 2002-03. Stockpiles were burgeoning, and something had to be done. Something was (it's not clear what, though there are rumours of Vietnam aspiring to the role of a 'swing producer'). And in 2003-04, demand, at an estimated 112 million bags, actually overshot the harvest of 103 million bags. Heaves of relief were heard all around plantations. Some relief was evident in the coffee-consuming world, too. The EU, which imports some 40 million bags, is a major consumer. So is the US, which takes in some 24 million bags of beans every year. Suppliers going bust is never good for anybody. If bean prices stay too low for too long, plantations might simply have to quit coffee farming, and this could set the stage for a coffee crunch some years ahead. Have coffee prices stabilized? Yes, at least in contrast to the turmoil of recent times. But will they start rising again? That's still not clear. The projected harvest for the current year 2004-05 is a good 117.7 million bags, and some effort will have to be made to push up demand. Branded coffee marketers have much thinking to get done.
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The
big coffee story is that it has the uncanniest knack of all---of doing
strange things to people wherever it trickles its way to. That's history,
of course.