European Coffee Federation Releases Annual Report Highlighting Impact of Ukraine/Russia Conflict

CoffeeNetwork (New York) – According to data from the 2022-2023 Annual Report from the European Coffee Federation, Western Europe imported 55,924,883 bags of green coffee in 2022, a 6.2% increase from the 52,643,018 bags imported in 2021.

EU27 countries absorb 94.1% of total green coffee imports into Western Europe with 2.95 million tonnes in 2022 (+5.9% yoy). However, the recovery of EU27’s green coffee imports has not yet compensated the effects of the Covid pandemic. It has to be noted that EU27’s green coffee imports (excluding UK imports in the calculation) in 2016 reached 3.21 million tonnes, while in 2017 the figure was 3.08 million tonnes decreasing to 2.81 million tonnes in 2018. Current imports are therefore still roughly 8% below the 2016 peak level.

The figures for Central and Eastern Europe are only available for 2020 and 2021. Countries in Central and Eastern Europe increased their imports of green coffee in 2021 to 0.3 million tonnes (+3.6%) with the Russian Federation being responsible for most of this growth (7,000 tonnes, roughly 70% of the total increase).

The figures for Europe as a whole are only available for 2020 and 2021. European imports of green coffee reached 3.46 million tonnes in 2021 (+0.4%), again very stable but far from the pre-pandemic peak level reached in 2016 and 2017 with 4.1 and 3.9 million tonnes, respectively.

During the analysis period (2020-2022), green coffee imports seem to be concentrating even further in the traditional major importing countries. Germany remains the largest importer with 36.8% of EU’s green coffee imports coming through its ports in 2022 (+0.9% yoy) with Italy posting the largest growth adding 96,887 tonnes (2020-2022) to reach 650,100 tonnes (22.1% of EU imports). Coffee traffic through Belgian ports also increased rapidly (+71,474 tonnes in the analysis period) and Belgium now imports 12.8% of total green coffee into the EU. Spain is the fourth largest importer with 256,503 tonnes in 2022 (8.7% of total green coffee EU imports). These four countries (Germany, Italy, Belgium, and Spain) channel on aggregate more than 80 % of total EU imports of green coffee. Therefore, green coffee imports tend to concentrate on traditionally large importers or those countries where the busiest ports in Europe are located.

After leaving the EU in 2020, imports of green coffee to the United Kingdom diminished during 2021 (-4.9% yoy), returning to “normal” levels in 2022 with 176,618 tonnes (+19.2% yoy). Although still far from its peak level of imports (189,590 tonnes in 2018). During the analysis period, green coffee imports to the UK increased by roughly 21,000 tonnes. Only 5.7% of green coffee imported in 2022 by the United Kingdom came from EU27 countries.

Outside the EU27 area, Switzerland remains a key importer of green coffee in Europe with close to 200,000 tonnes in 2022, adding more than 18,000 tonnes during the analysis period (+10.2%). The Russian Federation is the other relevant non-EU market in terms of imports volume (over 205,000 tonnes in 2021) and growth during the analysis period (+7,000 tonnes or +3.5%).

Shipping after the pandemic has been transformed and the need for efficiency gains gave large ports in Europe an advantage over cost, distance to market or other criteria. This fact could explain the reduction in direct imports of green coffee to countries such as Sweden (-10.0% during the analysis period), Poland (-27.7%), Finland (-12.6%) or Bulgaria (-13.4%). Coffee consumption in these countries has not decreased with these figures just representing imports being funnelled towards the largest European ports mainly located in Germany, Italy, Belgium, and The Netherlands. The same hypothesis would explain France’s case (-7.5% during the analysis period) with Antwerp or Rotterdam boosting their role as green coffee entry points to France and the EU as a whole. Other landlocked countries such as Hungary or Czechia have substantially reduced their green coffee imports during the analysis period: -85.1% and -36.2%, respectively. Green coffee imports by some smaller EU members have virtually disappeared: Malta (1,4 tonnes), Luxembourg (55.9 tonnes) and Croatia (160,5 tonnes).

Brazil remains the largest supplier of green coffee to EU27 countries with its market share now well consolidated over one third of total EU27 imports (35.3% in 2022). Brazil supplied 1,041,696 tonnes of green coffee in 2022 after adding 109,385 tonnes during the period of analysis 2020-2022 (+11.7% on aggregate).

Viet Nam supplied another 648,005 tonnes of green coffee to the EU27 area or 22.8% of its total imports. However, Viet Nam’s figures are far from its peak export levels reached in 2018 with more than 758,000 tonnes acquired by EU27 countries and a market share above 25% in the region. In any case, Brazil and Viet Nam have consistently ranked as the top-two suppliers to EU27 countries during the last decade, typically supply over 55% of the total green coffee imported by this economic area (58.1% in 2022).

Each of the other green coffee origins supplying the EU hold a market share below 10%, with Uganda and Honduras regularly swapping places – third and fourth – depending mostly on harvesting conditions. However, Uganda seems to have consolidated its exports at a substantially higher level during the analysis period. Uganda exported 214,649 tonnes of green coffee to EU27 countries after increasing by 29.4% during the analysis period (+48,789 tonnes), becoming the “coffee powerhouse” of Africa. Uganda alone supplies more coffee to the EU27 than the rest of Africa combined. Although origins in East Africa such as Ethiopia (+15,000 tonnes) or Tanzania (+5,000 tonnes) showed a positive trend, traditional West African producers saw their exports to EU27 countries decline during the analysis period: Côte d’Ivoire (-12,000 tonnes) and Cameroon (-6,000 tonnes).

Honduras remains the fourth largest green coffee supplier to EU27 countries, although exported volumes are in sharp decline, and so is this origin’s share of the EU27 market, falling from its 2020 peak at 7.8% to 5.4% in 2022. Figures in tonnes are more explicit and green coffee exports from Honduras plummeted by close to 27% during the analysis period or 68,000 tonnes less coming into the EU27 market from the Centro American country.

The overall ratio of Arabica-to-Robusta green coffee imports seems to remain stable throughout the years at slightly below two-thirds to one-third: 60.9% of Arabica coffee compared to 35.2% of Robusta coffee was imported by EU27 countries in 2022.

Within the ‘Arabicas’, the share of ‘Brazilian Naturals’ fell slightly being compensated by the increase in ‘Other Milds’ imported from origins such as Honduras, India, and Peru. ‘Colombian Milds’ also decreased following the trend set by green coffee imports from Colombia, its main origin. Imports of Robusta coffee are driven by growing imports from Uganda, Viet Nam, and Indonesia.

Green coffee imports represent more than 95% of the total volume of coffee and coffee-related products imported into the EU27 area. In spite of this, the analysis of other coffee products is also relevant in order to better understand the European coffee market. Although roasted and soluble coffee trade is modest in volume it is much more relevant in terms of value and market position.

Green decaffeinated coffee imports have substantially increased during the last decade. They jumped by 54.7% in 2021 to 18,076 tonnes, probably compensating the low volume in 2020. EU27 countries imported 15,923 tonnes of green decaffeinated coffee in 2022 (-11.9% yoy), a lower figure but still approximately 50% higher than in 2015.

Imports of roasted coffee into the EU27 trade bloc have also followed an upward trend during the last decade, peaking in 2020 when they reached approximately 91,000 tonnes. In 2021 and 2022 this trend has been reversed with an accumulated reduction during the analysis period of 12.1% to 79,961 tonnes. Roasted coffee imports follow a 95:5 ration patterns for regular and decaf coffee.

Soluble coffee imports were following a downward trend before the pandemic (47,584 tonnes in 2018), but changes in consumer behaviour drove coffee consumption at-home to record levels. Soluble coffee benefited from this trend and imports of soluble coffee rocketed to 63,577 tonnes in 2020. Imports of soluble coffee to the EU27 area in 2020 were also somewhat distorted by the effects of Brexit, since the United Kingdom instantly became the bloc’s largest supplier with more than 22,000 tonnes. After returning to closer to average levels in 2021, imports of soluble coffee picked up again in 2022 to 58,225 tonnes (+5.1% yoy). Brazil and India have traditionally been the EU27 area’s largest suppliers of soluble coffee.

The trade balance for green decaffeinated coffee clearly favours the EU27 area with exports topping imports by approximately 58,000 tonnes in 2022, although this figure has been shrinking during the analysis period.

Roasted coffee’s trade balance is even more favourable to the EU27 trade bloc in terms of volume, and it must be noted that its impact is even larger if considered in terms of value. EU27 countries exported close to 217,000 tonnes of roasted coffee in 2022, exceeding imports by approximately 137,000 tonnes. This superavit has consistently increased during the past decade with a 25% increase on aggregate during the period of analysis (2020-2022).

Re-exports of green coffee from EU27 countries increased by 9.5% to 64,963 tonnes in 2022, with the EU27 trade bloc consolidating a strong position as re-exporter of green coffee. Exports of green coffee from EU countries has climbed by more than 50% since 2016.

Exports of green decaffeinated coffee continued to slide down to 73,947 tonnes in 2022 (-10.3% yoy). After a decade of decline, green decaffeinated exports have been substantially reduced falling by more than 25% on aggregate since 2016.

Exports of roasted coffee in 2022 kept to the pace of growth followed during the last decade. EU27 countries exported 216,783 tonnes of roasted coffee (+2.7% yoy). During the analysis period, the EU27 area has added more than 16,000 tonnes in additional exports of roasted coffee, a figure that climbs up to a staggering 95,000 tonnes if we compare with 2016 exports.

Soluble coffee exports inched down to 76,345 tonnes (-0.6% yoy) but remain significantly above pre-pandemic levels. As explained above, trade in soluble coffee expanded during the pandemic and has consolidated at higher levels during the analysis period.

Two key events altered exporting trends for EU’s roasted coffee during the analysis period: Brexit and the invasion of Ukraine.

Brexit has turned the United Kingdom in EU27 countries’ first customer for roasted coffee, Exports in 2020 reached 48,512 tonnes, probably as a consequence of a conservative stocks build-up approach by British operators. Exports to the UK decreased to 38,056 tonnes in 2021 and stabilised at slightly below 40,000 tonnes in 2022. Still, the United Kingdom is set to remain EU27’s largest export market with a market share of 18.2% in 2022.

The Russian Federation has traditionally been EU27 countries’ largest customer for roasted coffee. Exports to the Russian Federation consistently increased during the last decade and peaked in 2021 at 30,128 tonnes. However, the invasion of Ukraine has instantly reversed this trend and deliveries of roasted coffee to Russia sunk by 14.6% in 2022 to 25,737 tonnes. That means a reduction of 4,391 tonnes of roasted coffee exported from the EU27 trade bloc. Still, the Russian Federation represents 11.9% of EU exports of roasted coffee. In the meantime, EU27’s exports to Belarus have increased in 2022 by 5,017 tonnes (+140.3%) to a whopping 8,592 tonnes. Belarus is now the 7th largest customer for the EU27 area.

Ukraine remains as the third largest export market for roasted coffee originating in the EU27 area. Exports to Ukraine almost doubled during the 2016-2021 period (+82% on aggregate) peaking at 24,387 tonnes in 2021. Exports to Ukraine declined in 2022 to 21,649 tonnes (-11.2%) as a consequence of the Russian invasion, but still absorbs 10% of total EU exports of roasted coffee.

The United States is the fourth largest export market for EU27’s coffee roasters. Deliveries to the US have been on the increase for the last decade, peaking at 19,922 tonnes in 2021. Exports to the US dropped by 7.2% in 2022 to 18,488 tonnes representing an 8.5% market share of EU27’s exports. Switzerland is also a traditional customer for EU27’s roasters representing a very stable export market with yearly sales of between ten and twelve thousand tonnes (12,042 tonnes in 2022, -2.9% yoy).

Regarding the EU27 area’s exports of soluble coffee (officially: extracts, essences and concentrates of coffee included in HS21011100), total exports remained virtually unchanged in 2022 (-0.6%) with deliveries staying at 76,345 tonnes to non-EU destinations.

Exports of soluble coffee have been conditioned by the same two factors – Brexit and the invasion of Ukraine –already mentioned in the previous section as well as their effects on roasted coffee exports. Their influence on soluble coffee exports is comparable.

Exports to the Russian Federation have plummeted to 4,524 tonnes in 2022. This figure represents -44.5% change during the analysis period and almost two thirds of soluble coffee sales to the Russian Federation have been lost since they peaked at 12,075 tonnes in 2016. In 2018 the Russian Federation absorbed 20.5% of total EU exports of soluble coffee while they only represent 5.9% in 2022.

Exports to the Ukraine have also fallen sharply in 2022 to 5,660 tonnes (-18.4% yoy). However, Ukraine remains as the third largest market for EU27-produced soluble coffee with a 7.4% market share.

Brexit has propelled the United Kingdom to the leading position among export markets for EU27 producers of soluble coffee. After reaching 25,351 tonnes in 2020 (33.5% of total exports), deliveries to the UK have steadily declined during the analysis period to 22,118 tonnes in 2022. This figure still represents 29% of EU27’s total exports of soluble coffee.

Overall, major EU27 markets have experienced very modest growth in terms of volume during the analysis period 2020-2022 (0 to 4% yoy), while market values have expanded significantly due to inflation: Germany (24% in value, 0% in volume); France (18% in value, 5% in volume); Italy (6% in value, 1% in volume); and Spain (14% in value, 6% in volume).

Alexis Rubinstein