Cautious optimism over coffee market prospects

12 November 2004
In his closing address to the Sintercafe conference in Costa Rica, the Executive Director stated that it was now possible to hope that over the next two years price levels could reach levels that would at least cover the cost of production

In his closing address to the Sintercafe conference in San José, Costa Rica on 10 November 2005, the Executive Director, Mr. Néstor Osorio stated that it was now possible to hope that over the next two years price levels could reach levels that would at least cover the cost of production and provide some additional income. This would be a slow process, but essentially arises from a greater balance between supply and demand. In 2003/04, world coffee production dropped from nearly 122 million bags in the previous year to just under 101 million. World consumption, on the other hand, can be estimated at between 113 and 114 million bags at present. Moreover, in the forthcoming year (2005/06) production in Brazil is expected to be lower in view of the fact that it is the off year in the Brazilian biennial cycle, suggesting that it will be significantly below current production in 2004/05 of some 38 million bags.
Noting that more and more attention was being given in the international coffee community to sustainability issues, Mr. Osorio referred to the initiative to create a Common Code for the Coffee Community. This was of great interest but required further study and analysis in order to ensure that the proposed implementation took full account of all aspects of creating a sustainable world coffee economy. This analysis was now being carried out and the matter would be debated extensively at the next ICO meetings in January 2005.