Predicted Global Coffee Shortage Is Nothing to Panic About
No matter how much coffee you drink on a day-to-day basis, 66 million pounds of coffee beans sounds like a lot of coffee. So this week, when the International Coffee Organization (ICO)—an intergovernmental group for coffee exporting countries—announced that they have "expectations of a global deficit in coffee year 2019/20" estimated at over half a million 60-kilo bags, your first reaction may be that it's time to start stockpiling K-cups. But don't worry: Though "consumption is predicted to overtake production during the course of the year," even the ICO describes this as a "small" deficit—and apparently, not only will coffee still be plentiful, retail prices likely won't even go up.
Despite the massive sounding number, turns out a half-million bags is actually just a figurative espresso shot in a sea of coffee. According to MarketWatch, that shortfall only amounts to about 0.3 percent of the global coffee supply. And even if the cost of raw beans did go up to rebalance supply and demand, those fluctuations would likely have no impact on the retail market. "I would strongly predict that if [the raw coffee] price went up 20 percent from where it is now, you would see no rise whatsoever in the retail price of good quality coffee," Peter Roberts, a professor at Emory University's Goizueta Business School and coffee industry expert, told the business site.
Meanwhile, though the ICO report may raise some alarms, it's important to remember that it's a monthly report assessing relatively short-term trends. "Brazil's smaller off-year Arabica crop and adverse weather in parts of Central America and Asia could continue to affect prices in the coming weeks," the report concludes. "However, the impact of these factors may be muted due to the recent weakness of the Brazilian Real as well as the upcoming on-year crop in Brazil." As a result, the predicted shortage discussed here is significantly different in nature than more dire predictions of a long-term coffee shortage due to climate change.
And in fact, in the coming years, the U.S. government actually suggests that, if anything, the price of coffee for consumers could effectively go down. "Whether you look at one year, five years or the last few months, we're looking at a solid downward trend [in retail coffee prices]," Steve Reed, an economist at the U.S. Bureau of Labor Statistics, told MarketWatch.
So in the end, no, don't start stockpiling coffee. It's for the best. Coffee tastes best with freshly roasted beans anyway.
