How Covid-19 is affecting coffee demand worldwide

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Global coffee sales are set to plunge this year, due to the impact of Covid-19.

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File image. Photo: Public domain

A new Rabobank report predicts the demand for beans will drop worldwide by over 1 million bags of coffee and cafes will lose out as people continue to brew their own at home.

Alice Burton from John Burton Coffee, New Zealand’s largest green coffee importer, told Morning Report: “Traditional buying patterns have inevitably changed since Covid-19 began. The decline of out-of-home coffee consumption driven by closure of cafes and restaurants has been short term in New Zealand but the new coffee habits formed may reflect the new normal.

“They dusted off their old plunger, their own stovetop and got into brewing at home … we have seen growth in cafes since they reopened but it is hard for New Zealand businesses.

“The key contributing factors to the drop have been stockpiling. A lot of global sales increased in March as people stockpiled coffee causing businesses to run out of stock. The cafes and restaurants shut down, and also recession, so now unemployment and pay cuts.

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“Supply is strong though, Brazil is having one of their biggest crops ever coming up so pricing will reflect the supply in the market. But as the demand drops, farmers will have to review the prices.”

She said it was hard to say how much the price of a coffee to a customer actually reflected the price of beans.

Other factors to consider were things like the cost of rent or milk.

“I think coffee prices have stabled out, it’s just now going to be a matter of what our dollar does because that’s huge for us as importers.”

The novel coronavirus had not affected supply lines for John Burton Coffee.

“In terms of supply, we have plenty of stock in our warehouses, it’s just how sales are going to go. We’re not looking forward and seeing when we next need to buy and we’re trying to use up the stock we’ve got before we buy again.”

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