(Bloomberg) -- Global consumption of coffee is likely to climb by 1% to 2% a year through the end of the decade, according to International Coffee Organization Executive Director Vanusia Nogueira, who estimated about 25 million more 60-kilo bags will be needed over the next eight years.

“We are more conservative now for a short-term projection,” Nogueira said during a conference in Hanoi held by the Vietnam Coffee-Cocoa Association, referring to all the events the world is facing, including high inflation in Europe and the war in Ukraine. The group’s earlier forecasts for consumption growth averaging 3.3% a year over the long term were too “optimistic,” she added.

The global market will reach a balance in supply and demand in the next two or three years, from a deficit now, Nogueira said in a Bloomberg interview.

The world needs more of both arabica and robusta beans, but increases in robusta production and demand will be higher, she said. Traditional arabica producers are trying to grow more robusta amid global warming, while roasters are seeking to add cheaper robusta to their blends. “If you have robusta with higher quality, consumers won’t feel a big difference in the blends.” 

Many markets are looking for fine robusta, Nogueira said. Vietnam is doing its homework on expanding to high-quality robusta production “quite well,” she said, recalling her surprise on tasting three sets of “very good” coffee cups during a visit a day earlier with a group of international guests to a coffee shop owned by the nation’s second-largest exporter Vinh Hiep Co.

The group doesn’t see Vietnam’s global dominance of robusta exports being hurt by Brazil’s increased production of conilon, because the extra output will go to supply the South American country’s soluble industry, the world’s largest, according to Nogueira. Producing nations need to boost domestic consumption for better prices and benefits to their economies, she said. 

Vietnam sees domestic coffee consumption rising 5% to 10% in coming years, from the current 300,000 tons, which includes 170,000 tons used for instant coffee production, Do Ha Nam, vice head of the country’s coffee association, said during the same conference.

Nam, who is also chairman of the nation’s top shipper Intimex Group, projected that shipments from Vietnam will drop in 2022-23 because of lower production and insignificant carry-over stocks from the previous season.

The International Coffee Organization is an intergovernmental group of exporting and importing countries, representing more than 90% of world production and over 60% of consumption, according to its website.

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