DJ Illycaffe CEO: World Needs 25M More Bags Of Coffee In 10 Years

DJ Illycaffe CEO: World Needs 25M More Bags Of Coffee In 10 Years
Leslie Josephs  CHARLESTON, S.C. -
The world will need another 25 million bags ofcoffee in a decade due to rising global demand, particularly from emergingmarkets, Andrea Illy, chief executive of Italy's illycaffe said Saturday.   Global coffee demand is growing at about 2% a year, and along with badweather in big growing regions like Colombia, it will likely soften the impactof a large crop expected out of Brazil this year, Illy told Dow Jones Newswireson the sidelines of a coffee conference in Charleston, S.C.   "We expect demand to continue to grow...mostly in emerging markets," he said.  Expectations of a record harvest from Brazil, which begins harvesting itsbeans in May, have sent futures prices of arabica coffee tumbling. Arabica forMay delivery on ICE Futures settled Friday up 1% at $1.7875 a pound.Front-month prices are down 21% this year.   But the world is headed for a shortfall in the following year, when Brazilwill have a smaller, off-cycle crop, said Illy.   "There will be enough coffee to satisfy demand [this year] and replenish alittle bit of the extremely depleted stocks and then prepare for the next yearwhen there will be another shortage of production, even after this abundantBrazilian crop," he said.   Also countering the large Brazilian crop is climate change, said Illy, sinceit is crimping global coffee supplies.   "Global warming is also causing some erratic climate behavior...in differentparts of the world, impacting very large producers like Indonesia, CentralAmerica," he said.   On Friday, Luis Genaro Munoz, chief executive of the National Federation ofCoffee Growers, said the country will produce 7.8 million 60 kilogram-bags in2012, unchanged from the previous year. Torrential rain has hurt threeconsecutive harvests from the country, one of the largest producers of arabicabeans.   In the long-term, prices will need to be high so farmers can increaseproduction. Otherwise, producers could be lured to other crops, Illy said.