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Spain's bulging coffee power.

In recent years some observers have thought that Spain's trading and roasting community was most likely buying and stocking up in green coffee at maximum capability. This thinking came in part because the extent and nature of Spanish coffee business was relatively unknown prior to the mid 1980's, which in turn was a hectic period of rapid change and expansion for coffee in Spain.

So, as the country's imports of green coffee began to rise steadily and significantly throughout the past decade, a handful of reasons were assigned for the phenomenon; it came as result of Spain's entry into the European Community, it was attributable to the after shocks of market liberalization, to the entry of the multinationals as roasters and traders, to the evolution of a mass retail market for roast and ground coffees, it reflects the crash in coffee prices and an increasingly more accurate accounting of actual imports.

All of these rationals are indeed factors and were/are important elements in the boom. But it must also be acknowledged that Spain evidently has an impressive and uncharted depth in coffee resources, both in its own fight and as supported by foreign interests. In fact, Spain is rapidly taking position as a coffee power base in Europe in terms of green coffee imports, business services, and handling capabilities. The proof of this is realized in the trade and industry statistics for 1992.

During 1992, Spanish green coffee buying took a great leap forward with an increase of 14.3% in volume over the level set in 1991. Even when measured against the imports

of 1990, an all time high of 175,826 tons, the purchases in 1992 are an increase of 10.8%. Spain imported 194,730 tons of green coffee during 1992. This translates as 3,245,500 bags.

To give perspective to such buying, remember that Spanish green bean buying rose significantly in the early 1980's to a level of 149,092 tons in 1986, then settled at 147,198 tons in 1987 and at 148,966 tons in 1988--the average for the three-year period was 148,419 tons. At the time, in 1988, analysts thought this level was most impressive and quite high for a nation that was said to be actually consuming no more than 125,000 tons of green coffee per year. Yet only four years later, as shown in the buying performance of 1992, the high average of the 1986-88 period is surpassed by 31%.

The message here is that if the surprising level of Spanish purchasing continues, we must stop being surprised and recalculate the actual national consumption and/or stocking capability. Another hint to be taken is that with the rise of Spain as a coffee buying, roasting, and stocking power, Europe has a new wild card in its pack.

Green Market Share

Reviewing the statistics for 1992, we find that the classic ingredients of the Spanish cup not only retained their consistent shares of the nation' s imports, but gained across the board: Brazil confirmed its dominance, holding 28.6% of all imports (versus a 27% share in 1991); Colombia took 14.4% (against 12.8% in 1991); Ivory Coast held 11.4% of green coffee imports (11.1% in 1992); Uganda shipped 10.7% of the total (versus 8.8% the year earlier); and Cameroun held 10.3% of the Spanish market (against a share of 7.7%). These five origins combined saw 146,732 tons of green coffee cleared into Spain, which is more than 75% of the year's total.

Leading origins with the most spectacular gains last year in share were Colombia, up 30.1%; Uganda, up 40.7%; Cameroun, up 52%; and Costa Rica, up 47.9%. Among the leaders, those with decreases in market presence included Indonesia, in sixth place in the rankings, down 1.2%; Kenya, in ninth position, off 7.4%; and Zaire, in 10th rank in 1992, off 48.2%. The decrease for Zaire marked the most significant market shift for any origin in presence and position.

Overall, last year's buying shows a slight regression in Robusta purchases, although the long term trend in Spain during the past decade has been for steady and strong increases in Robusta market share. Robusta presence in Spain hovered in the 25% share neighborhood at the beginning of the 1980's, then rose to about 30% in the mid 1980's, before gaining vigorously in recent years to a fairly consistent 47% share of green coffee imports.

As for concerns on cup quality in Spain, which has had professionals wringing their hands for years, the statistics for 1992 by themselves would seem heartening as they show strengthened general interest in the more classic Robusta and Arabica origins-in the coffees of western Africa and of Central America, for example. Some of the power behind the boom in green coffee purchases is attributable to the rapid expansion in Spain's retail sector for roast and ground coffee. In 1984, R & G retail sales came to only 7,700 tons. Seven years later, in 1991, sales of roast and ground had mushroomed more than sixfold to reach 45,500 tons. In the same seven-year period, overall retail sales of roasted coffee more than doubled in Spain, climbing to 58,000 tons in 1991. As a detail of the retail sector, sales of decaffeinated coffee have nearly doubled in the past three years and now account for 5.4% of roasted coffee sales. Spain also has a quite large hotel/bar/care sector in its coffee business. This is in fact the world's third largest espresso market, in place after Italy and France, and it too has been growing although not with such potency as the retail sector. As well, Spain has an extensive and stable soluble coffee market, which actually accounts for 20% of green coffee imports. Quantifying the sum, annual Spanish market, in-home and out-of home, roasted and soluble products, is not easy, although it has now been placed as at around 150,000 tons in green weight.
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Title Annotation:includes related article on Roure Tectosa; On the Continent
Author:Bell, Jonathan; Byall, Avi
Publication:Tea & Coffee Trade Journal
Article Type:Column
Date:Oct 1, 1993
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