Bloomberg News

Africa’s Coffee Industry Has Chance to Benefit From Disruptions

February 14, 2013

Africa has a “unique opportunity” to boost coffee output and benefit from rising demand as other growers face supply disruptions, the executive director of the International Coffee Organization said.

Africa would benefit because “many countries in Central and South America are experiencing difficulties in keeping with current production levels,” Roberio Oliveria Silva, the executive director of the London-based ICO, said at a conference today in Kampala, Uganda’s capital. Leaf rust is cutting production in Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua, the Dominican Republic and Mexico.

Africa’s coffee production dropped since the collapse of the International Coffee Agreement in 1989 which resulted in lower coffee prices, Silva said. Sub-Saharan Africa coffee output will be 16.8 million bags in 2012-13, down from 21.1 million bags in 1988-89, U.S. Department of Agriculture data show. Demand is climbing about 2.5 percent a year, Silva said.

Global coffee production may climb this season to 153.6 million bags from 149.2 million last season, Judith Ganes-Chase, president of J. Ganes Consulting, said in an interview at the conference. Next season output may be 159 million bags, she said. Demand is estimated to climb to 146 million to 147 million bags in 2012-13 from 144 million to 145 million bags a year earlier, she said.

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net


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