• Stocks or inventories in importing countries


    Stocks held in importing countries are usually referred to as inventories in order to distinguish them from stocks held in producer countries. Inventories tend to grow when prices are low and deplete when prices are higher, although the relationship is far from linear.

    Consumer-held stocks were relatively stable throughout the 1980s but increased dramatically with the suspension of quotas in 1989 and the collapse in prices. They fell in response to the price hike in 1994 but began to expand again with the collapse in prices during 2000 and 2001. By March 2010 they totalled just over 20 million bags, which is equivalent to about 11 weeks of consumer demand
    Once again some caution is required when looking at these figures as much of the data on consumer-held stock either is not published or is published only sporadically. Furthermore, as for producer-held stocks, a certain proportion of this should be seen as working stock, that is, the amount of coffee in the system or pipeline at any one time.

    In the past most analysts worked on the basis that around 8 million bags were required as consumer-held working stock. However the adoption of the just-in-time stock management system by most of the world’s major roasters, together with the improvement in logistics, has meant that the volume that probably should now be considered working stock has been reduced to maybe as low as 4 million bags.

    The figure below shows the evolution of inventories since 1990 together with the composite indicator price. (Source: ICO)



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