World Coffee Consumption Soar in 2020 according International Coffee Organization

World coffee consumption could soar by more than one-quarter by the end of the decade, the International Coffee Organization said, questioning fears of "oversupply" it blamed for sinking bean prices.

The intergovernmental group added to expectations for world coffee supplies by raising by 480,000 bags to 131.9m bags its forecast for output in 2011-12.

A downgrade of 1.8m bags to the crop in Ethiopia, where weak exports raised doubts over official forecasts of a record harvest, was more than offset by raised expectations for Tanzania and Uganda, and a 1.7m-bag upgrade to the crop in Vietnam, the world's top producer of robusta beans.

And with top arabica coffee producer Brazil on the start of a 2012-13 harvest expected to show a sharp rebound, to 54.0m bags, in what is an "on" year in the cycle of higher and lower producing seasons, the ICO acknowledged the thinking behind falling coffee prices.

New York arabica beans for July on Thursday fell to a fresh two-year low, for a spot contract, of 151.00 cents a pound.

"Prospects of a high production level in Brazil in crop year 2012-13 and increased production in some exporting countries… have doubtless triggered speculation on the possibility of an oversupply in the world market," the ICO said.

However, it downplayed fears of a glut, noting demand which has grown by 2.5% a year since 2000, led by 4.3% annual growth in emerging markets.

"Prospects of a continuing demand for coffee remain promising, particularly in emerging markets and exporting countries, in addition to the growth of niche markets," the London-based organisation said.

"Buoyant world consumption should help maintain a fair balance between supply and demand."

Indeed, "if world consumption continues to grow at the same high rate as in the recent period, it could exceed 170m bags by 2020", the ICO said.

The organisation estimates the 2011 consumption at 137.9m bags.

The comments, nonetheless, failed to revive New York arabica coffee prices, which stood at 151.30 cents a pound at 07:45 local time (12:45 UK time) for July delivery.

Prices of the bean have been sapped by, besides output expectations, a weaker real, which cushions the blow to Brazilian producers of weaker dollar prices.

In London, robusta coffee futures, which have far outperformance arabica in recent weeks, eased 0.4% for July delivery to $2,082 a tonne.

The upgrade, to 20.0m bags, in the ICO's estimate for the Vietnamese crop still leaves the organisation more downbeat than some other commentators.