Why the Local Coffee Market may become more Lucrative than the International Markets for East African Coffee Dealers

Regional coffee roasters and retailers are increasingly falling back on the local markets, as domestic consumption continues to bludgeon. The lure of the blooming domestic consumption is now growing stronger than that of the lucrative international markets, especially given the spate of unnerving price fluctuations that have hit the international markets in recent times.

No doubt, the demand for coffee is waxing in high-income regions like China, the Middle East, Russia, and North America. This is enhancing the prospects for the regional coffee dealers in the international market. However, on the home front, local coffee drinkers have been creating an unprecedented demand for coffee.

The Growing Trendiness of Coffee Consumption in the Region

The Expanding frontiers of the local market owe more to the fledging coffee culture than to the records of coffee cultivation in the region. Although the region is the point of origin of the coffee beans being grown expansively in other parts of the world, the region’s coffee consumption rate has been paled by those of other regions of the world all along. The stronger preference for tea in this region also contributes to the relatively lower patronage of coffee in the region.

But according to reports, coffee consumption in the region has increased by 20 percent in the last five years. The sprawling growth of the urban middle class is mainly responsible for the fledging coffee culture in the continent. In Kenya, the increase hit 46% between 2010 and 2014. In Uganda, the price and the distribution of the coffee have grown more favorable for local consumers. As a result, consumption has proliferated at an unprecedented rate. In Uganda, there was hardly any coffee shop in Kampala. But they’re springing up everywhere now, with the figures now cantering past 40.

Why the Local Markets are Becoming More Favorable than the International Market

Many local growers and dealers are now turning to the blooming local markets to hedge against the price volatility in the international market. The world’s largest coffee producer, Brazil, has had many tumultuous years recently with regards to coffee prices. In the arabica market, coffee prices experienced an uptick to $2.29 last year and then dipped to $1.16 later on that same year. But despite this boom in consumption, the region’s consumption rate still lags behind other parts of the world. For instance, the consumption rate in Ethiopia stands at 2.5kg per person, and Madagascar 1.28kg, but that of Brazil stands at 6.2kg and Britain 5.8kg.  

How Coffee Growers are Bracing up for the New levels of Local Demand for Coffee

The present boon in coffee consumption has been quite remarkable, so much so that questions are now being raised concerning the capacity of local producers to meet up with demands for the cash crop in their locality. Coffee production has actually been backpedaling in recent years, despite the growing demands for the cash crop both at home and abroad.

But in spite of the bottlenecks inhibiting production in the region, there’s a palpable air of optimism about coffee production in the region. It is believed that the bludgeoning consumption rate in the region will induce greater interest in the coffee production and bring about the much-needed boost in production.