Economic development in coffee farming countries has brought urbanization and a pronounced shift in global coffee demand, where big exporters are now the top new consumers.
This has trimmed supply and driven up the price of quality arabica beans for coffee drinkers in North America and Europe over the past decade.
Coffee, for centuries shipped from farms in Africa, the Middle East, Latin America and Asia to the bourgeois classes of the industrializing West, is increasingly craved in home markets, even being imported by producing countries, where wealthier drinkers are switching from cheaper instant and robusta beans to milder arabicas.
World coffee consumption will grow by 2.5 million bags from 2008 through 2010 to nearly 131 million bags, Neumann Kaffee Gruppe's (NKG) statistics director Neil Rosser said.
"Almost all of the growth in demand has came from emerging markets in the past few years," he said.
Over the period, demand has grown by 1.3 million bags in Latin America and by roughly the same in South East Asia. Another 450,000-bag increase has come from the Middle East, "while North American numbers are falling," Rosser added.
Uraban Cafe Culture
The first wave of global urbanization started around 1900 in the industrialized world, a time when coffee use was spreading widely in Europe and the United States. The second wave now occurring in the developing world bodes well for coffee producers.
The United Nations estimates the world's urban population has quadrupled since 1950 to 3.4 billion and will nearly double again by 2050.
The taste for coffee in producers such as Brazil, Colombia, Indonesia and India is developing with the incomes of the poor and their migration to cities.
Coffee drinking has doubled in China since 2002 to around 600,000 bags, International Coffee Organization data showed. Consumption was also surging in other emerging markets such as Russia, South Africa, South Korea, Saudi Arabia and Ukraine.
Brazil, the world's leading producer of coffee, may overtake the United States as the No. 1 consumer of the drink by the end of the decade, analysts say. It is already the world's second largest consumer, thanks to its growing middle class.
Coffee consumption passed unscathed through the economic crisis of 2009 and is set to grow about 5 percent in 2010, the Brazilian Coffee Industry Association (Abic) said.
If not for an import tariff, Brazil would import Asian robustas, according to Abics, the Soluble Coffee Industry Association.
As it stands, of the top five producers, only Brazil and Vietnam are not expected to import coffee this year.
The world's fourth and fifth largest producers Indonesia and India will be forced to import robustas from the world's No. 2 coffee grower Vietnam to feed their instant coffee industries.
"Many people are stressed out, so they go out drinking coffee," Hasan Widjaja, chairman of the Coffee Exporters Association in Indonesia -- the world's largest Muslim majority nation, said.
Indonesia, which is forecast to produce 9.6 million 60-kg bags this year, is expected to see consumption leap by more than a third to 4.5 million bags, the association said.
For the first time in years, India will import beans for its instant coffee industry, totaling around 600,000 bags. Indonesia will import 800,000 bags, as will Colombia whose recent poor harvests have depleted stocks, forecast Rosser.
"With changing lifestyle, rapid urbanization, and growing income levels, we observe that instant coffee consumption is rising, especially in big cities," Anil Kumar Bhandari, a big grower member of India's state-run Coffee Board, said.
Domestic coffee consumption is seen growing 3.5 percent in 2010 in India due to economic growth and a blossoming cafe culture, the board said.
"Historically, as more people move into cities,
