Africa, China, Laos might close coffee supply gap

Africa, China and Laos may be able to close a projected supply gap in the world coffee market if they open up new areas to cultivation, according to Hencorp Futures.

The continent and the two nations have ideal land for agriculture, managing director Oscar Schaps said Thursday in an interview at a conference in Arusha, Tanzania. The market shortfall might amount to 20 million bags in a decade, he said. Hencorp Futures is a privately held firm headquartered in Miami, Fla., that specializes in risk management and execution of futures and options.

Global coffee consumption is rising 2 per cent annually and may come to more than 150 million bags in 10 years' time, compared with 131 million bags in 2010, according to Schaps. The predicted gap offers an opportunity to Africa in particular to add to its market share, which has slid from more than 30 per cent in the middle of the 1970s, he said.

"The world will need 20 million more bags in 10 years, and Africa should be a good region to respond," said Schaps. "Is Brazil going to respond to this? The answer is that opportunities are available in China and Laos."

Africa now accounts for between 12 per cent and 15 per cent of world coffee supply, Schaps said. Ethiopia is the continent's biggest grower and Uganda ranks second, while Brazil is the largest producer globally.

Coffee consumption is increasing by 4 per cent annually in producing nations and by 5.4 per cent in eastern Europe, according to Schaps.

Arabica coffee traded in New York jumped 77 per cent in 2010, advancing for an eighth year in nine, and robusta beans gained 62 per cent in London.

(Source: http://www.vancouversun.com/business/Africa+China+Laos+might+close+coffee+supply/4304810/story.html)