Is There Gonna Be a Coffee Shorateg in 2023?

Coffee is a beverage preferred by many, and there is not a single day people cannot see each other consuming it. Just like a cup of coffee in their hands, the talk about the global coffee trade is always in demand. Just recently, the global coffee market is expected to experience prolonged coffee shortages after the weak supply of green coffee beans from top coffee suppliers in Asia responsible for this issue.

Top coffee suppliers in Asia are reported to meet substantial deficits in terms of coffee production this year. A contrast with the demand, where it is reported to meet a CAGR (Compound Annual Growth Rate) of 5.21 until 2030 (Contrive Datum Insights, 2023). If this situation continues, the demand is expected to outstrip the supply.

When a giant crowd is ready to in on the game, it is wise to stay prepared and updated. Here is the projection of the situation inside the global coffee market in 2023.

Inside the Top Coffee Supplier Countries

After the USDA (United States Department of Agriculture) forecasted that coffee production in Brazil will meet a deficit in 2023, coffee business owners are now eyeing other coffee supplier countries. On the other hand, the situations in the top coffee supplier countries are reversed from what is expected.

The domestic coffee market in Brazil, the biggest coffee supplier in the world, is heated up due to limited supply and rising prices. Even the experts are only able to mention 3 million coffee bags when asked about the highest prediction for coffee production (Angel, 2023). The price is expected to rise when sourcing green coffee beans from this country.

While the total coffee production in Vietnam is reported to decrease, their coffee stock has also been affected. The Star in an interview with Do Ha Nam, the vice chairman of the Vietnam Coffee and Cocoa Association, stated that the total coffee production is forecasted to significantly drop. The total coffee production dropped by 10% to 15% year-on-year. This situation is getting worse after Vietnam is reported to have no green coffee beans stock left to be exported this season (Angel, 2023).

FDA further mentioned that Indonesia might experience a decline in terms of coffee production. After the excessive rainfall disrupted the coffee plant’s growing process, this country is expected to supply only 9.7 million bags of coffee. A drop of 18% from the previous year. Based on this projection, many in the coffee industry will be directly affected by the high price of green coffee beans caused by the low supply.

What is the forecast for the global coffee market in the remaining of 2023?

In short, experts were still worried about the decline of global coffee production in Q1 to Q2 of 2023. Despite the ICO (International Coffee Organization) projection about a bounce back in terms of global coffee production, the ending inventories are still forecasted to remain tight at 31.8 million bags (Agaya, 2023; International Comunicaffe, 2023). Far worse, the soaring price is likely to continue as the extreme weather is reported to strike Indonesia and Vietnam, which is also followed by high demand until 2023 ends (Shan, 2023). Southeast Asia experienced record-breaking heat up to 44.2°C from March to May, which directly impacted the production of their green coffee beans due to the tight supply of water.

In contrast, the global exports of green coffee beans from top coffee supplier countries are rising in the midst of tight supply. According to International Comunicaffe (2023), 2 of the top coffee supplier countries raised the total export volume with the following details:

Vietnam: A surplus of 1.5 million bags to 26 million bags in total.
Indonesia: A surplus of 1.1 million bags to 7.7 million bags in total, and this number is highly possible to grow until the end of the year.

Based on this solid reason, coffee business owners are able to let out a sigh of relief while preparing for a new strategy to secure the coffee supply from top coffee supplier countries.

How is Coffee Shortage Impacting the Coffee Businesses?

Coffee is essential in many people’s everyday lives. From workers on their night shifts to students in their finals week. There is no surprise that the uncertainty in the global coffee market creates a domino effect for both coffee lovers and business owners. Be it coffee roasteries, coffee shop chains, mass retailers, and even the coffee supplier itself.

Many in the coffee industry get a substantial impact in generating more net profit due to increased operational costs. When there is no room for cost efficiency in the operational cost, business owners are pushed to seek other ways to keep up with good net profit. With only a limited supply of green coffee beans available in the global market, coffee business owners are now forced to double their products’ selling prices. This increased price might refrain customers from purchasing coffee and cut their caffeine intake, which means a drop in sales for business owners.

How Business Owners Are Coping with THE Shortage OF GREEN COFFEE BEANS?

If the rising prices in your coffee shop are caused by the shortage of green coffee beans, it is most likely that customers will bear the impact. Otherwise, you might be required to cut your profit to keep up with the surging price of green coffee beans. To perform well in the midst of a global coffee shortage, most coffee business owners today are turning their options to expand their inventory capacity and diversify their coffee supplier list. A wider inventory opens more room to store bulk green coffee beans and a solid partnership with a coffee supplier allows you to secure the green coffee beans supply during the shortage. Based on this solid reason, it is crucial to build a solid partnership with a dependable coffee supplier to prepare for the worst situation. Your coffee supplier plays a role as your ultimate protector from the green coffee beans’ price volatility and shrinking supply during the shortage.

Look at Wallacea Coffee, a direct-trade coffee supplier. Based on their solid partnership with Indonesian coffee farmers for decades, we are now able to provide a persistent green coffee supply in the midst of the global coffee shortage. Whether it is top-notch Arabica or premium-grade Robusta green coffee beans, we strive to fulfill our commitment as a coffee supplier by providing both varieties.

Enjoy the most competitive price available in the United States through a direct-trade coffee supplier. To purchase both Indonesian specialty coffee and commercial-grade coffee from Indonesia, feel free to reach out to us. Visit their BYOC (Build Your Own Container) system to place an order of bulk green coffee beans today.