The economic crisis may have dented the budgets of households but consumers across the globe are unlikely to cut back on their coffee intake, rather may shift to cheaper brands, according to International Coffee Organisation (ICO).
The current situation should not have a significant impact on coffee consumption. However, instead of reducing the intake, consumers may buy less expensive products, it said.
“The current economic crisis represents a major shake-up in the way global business is conducted. No sector has been spared from the turmoil, which has already caused a substantial slowdown in most industrialised countries,” ICO said.
Last year, the international coffee body had pegged global consumption at 128 million bags. One bag is equal to 60 kg.
According to a preliminary analysis of the effects of the macroeconomic downturn on the world coffee economy, coffee consumption in the developed nations like the US, Europe and Japan, which account for about 58 per cent of world consumption, is holding up well.
“Instead of limiting overall intake, consumers are more likely to shift from out-of-home to in-home consumption and from higher cost products to cheaper brands,” ICO said.
Consumers in the US and Japan were estimated to have consumed 21 million bags and seven million bags respectively in 2007, the ICO data showed.
It further said that in the producing countries like Brazil, Vietnam and India, which account for 26 per cent of global intake, consumption is not expected to suffer any major negative impact. India is estimated to have consumed 1.3 million bags in 2007.
ICO said that cutbacks in coffee purchases may occur in cases of widespread unemployment and economic instability. It also said that market fundamentals continue to be favourable to the maintenance of firm coffee prices despite the instability created by the financial economic crisis, it added.
