W50 Coffee Update: Climate Change Threatens Coffee Supply Chains and China’s Imports Surge in 2023

Global Climate Change Threatens Coffee Supply Chains and Sparks Price Concerns

Climate change poses significant challenges to global coffee production, potentially leading to a substantial price increase. The rising temperatures and unstable weather conditions in tropical growing regions are putting the growth of coffee trees at risk. Experts predict that by 2050, the land suitable for coffee cultivation may be reduced by 50%. While global warming could open new areas for cultivation, deforestation in potential regions poses obstacles. The European Union's (EU) threat to ban food imports from deforested areas could affect coffee expansion plans. Coffee prices have already shown an upward trend, with a 60% increase in green coffee prices over the past 30 years amid the visible impacts of global warming.

Vietnam's Coffee Prices Soar to 30-Year High

In W50, Vietnam's coffee prices surged to the highest level in over 30 years, driven by continuous demand from domestic and international markets. The price of green coffee in the domestic market reached USD 2.87 per kilogram (VND 70,000/kg), marking a 60% increase from the previous year's USD 1.72/kg to USD 1.76/kg (VND 42,000 to 43,000/kg). Farmers are holding back from selling in anticipation of higher prices. Vietnam solidified its position as the leading supplier of Robusta, distinguished by superior quality compared to Brazilian beans. The nation emerges as the preferred choice for global importers, given the high prices in India and Indonesia's emphasis on domestic consumption.

China's Coffee Imports Surge in 2023 with Brazil as Primary Source

China's coffee imports from January to October 2023 reached 113.54 thousand metric tons (mt), valued at USD 624.79 million, reflecting a 10.7% year-on-year (YoY) increase in volume and a 4.8% YoY increase in value. The primary sources include Brazil, Ethiopia, Colombia, Vietnam, Indonesia, and Malaysia, with Brazil holding the largest share, constituting 35.05% of the total imports. It is worth noting that China's coffee imports from Brazil surged by 153.6% YoY in volume and 151.1% YoY in value, totaling around 39.8 thousand mt valued at USD 152.88 million. In contrast, imports from Vietnam decreased by 29.2% YoY in volume and 17.3% YoY in value, totaling 13.55 thousand mt and valued at over USD 34 million. The shifting trend from tea to coffee and low per capita consumption make China an attractive market for exporting countries with room for further expansion in the coming years.

Gusii Coffee Farmers Union Launches GURAL Project to Promote Kenya’s Coffee Production

In Kenya, the Gusii Coffee Farmers Cooperative Union (GCFCU), in collaboration with a non-governmental organization (NGO), launched the Gusii Regenerative Agriculture Landscape (GURAL) coffee project. The project aims to enhance Kenya's coffee production and increase the farmers' income by facilitating the certification of coffee to meet global standards and aspires to reach one million farmers by 2030. GCFCU, comprising 28 affiliated coffee cooperative societies, is piloting the project with six cooperatives, benefiting over 60,000 farmers producing 15 thousand mt of coffee annually.