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level until the end of 2023. The price elasticity of de-
mand for coffee in some non-traditional consumer
countries will be protected to some extent as savings
rise.
Economic Growth: Global GDP rebounded from
the shock of the pandemic and is expected to contin-
ue to grow. While new virus strains continue to dis-
rupt and threaten the global economic recovery, there
are positive signs that the variants of the virus are
generally reassuring. Any improvement in economic
growth, along with wage growth, would offset infla-
tion and could also bring along a positive impact on
coffee demand.
Inflation-adjusted coffee prices: Historical-
ly, high prices have resulted in demand destruction
and the increased raw material costs passed on to
retailers or end consumers. This was also evident
earlier in 2010/11 when coffee futures hit 280+ US
cents/lb. However, subsequent inflation eroded the
real value of these prices. In other words, the current
futures market actually needs to hit 335+ cents/lb to
match the 2010/11 price highs, it generally indicates
this is the worst situation we have ever encountered.
COVID-19: If vaccine distribution and vari-
ant-specific boosters continue to increase globally
and manage to successfully control the spread of
COVID-19, we may see more demand growth this year
than we currently anticipate.

The future of global demand in coffee
market

The demand for coffee during the COVID-19
pandemic has faced great challenges. In 2019/20,
mainly driven by the compulsory home quarantine
worldwide, home coffee consumption increased, but
it failed to offset the losses of coffee consumed
outside (i.e. traditional commuting, office and food
service demand). Now that some new consumption
directions have gradually laid the foundation, and
coupled with the improvement of public-health
response to COVID-19, we should remain optimistic
about the prospects for coffee demand. The reasons
can be roughly summarized as follows: We should remain
Household saving: Probably due to the effect
of “preparing for a rainy day”, a psychological point optimistic about the
of view, relevant data shows that by the end of 2021,
global household saving has decreased compared with prospects for coffee
the abnormally high level of 2020, but it is still high-
er than the average level before COVID-19 pandemic. demand.
The savings rate is expected to remain above 2019

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