LONDON, UK – The ICO has released the first issue of the new economic publication of the ICO: Coffee Break Series: this issue of the Coffee Break Series focuses on demand-side effects of the novel coronavirus (covid-19) pandemic, assessing the relationship between reduced economic growth and global coffee consumption.
The novel coronavirus (covid-19) pandemic is a dramatic public health crisis with significant impacts on economies around the world. The spread of covid-19 represents an unprecedented economic shock in an interdependent world, as demand and supply are scaled back around the globe and across sectors.
The covid-19 pandemic is likely to have a profound impact on the global coffee sector, including production, consumption and international trade.
This brief provides a preliminary assessment of the demand-side effects of covid-19, specifically the impact of a global recession on coffee consumption.
The analysis is based on a sample of the top-20 coffee-consuming countries, which represent 71% of global demand, covering the period 1990-2018.
The results show that a one percentage point drop in GDP growth is associated with a reduction in the growth of global demand for coffee of 0.95 percentage points or 1.6 million 60-kg bags.
Additional demand-side effects relate to the impact of social distancing measures on out-of-home consumption as large parts of the hospitality industry are under lockdown and workplaces are closed.
Further analysis, in particular of the supply-side effect of the covid-19 pandemic, is necessary to understand the overall impact on the coffee sector and all actors along the global value chain.
These effects will be assessed in future issues in the ICO Coffee Break Series. Click here to read the report.