The move follows the launch of the Saudi Coffee Company last year, which is seeking to boost Saudi Arabia’s coffee production from 300 to 2,500 tons annually and further signal's the kingdom's aspiration to become a major coffee producer and trading hub in the Middle East
Coffee consumption in Saudi Arabia grew 4% annually between 2016-2021 | Photo credit: Sliman
The Council of Ministers of Saudi Arabia has approved plans for the Kingdom to sign the International Coffee Agreement, according to the Saudi Press Agency.
Established in 1962 to regulate global coffee prices, the International Coffee Agreement was updated for the first time in 15 years in June 2022 to enable the private sector to participate in the International Coffee Organization’s (ICO) sustainable coffee initiatives.
According to ICO, its members represent 98% of all coffee producing nations and 67% of coffee consumption markets.
The move signals Saudi Arabia’s ambition to become a major coffee trading and producing hub in the Middle East and globally.
Data from Saudi Arabia’s Public Investment Fund (PIF) indicates coffee consumption in Saudi Arabia grew 4% annually between 2016-2021 and is forecast to further grow 5% annually up to 2026.
In May 2022 the PIF launched the Saudi Coffee Company, a government-backed organisation tasked with growing the Kingdom’s coffee production.
As part of a wider SAR 1.2bn ($320m) investment, the Saudi Coffee Company will develop the Kingdom’s export capabilities to global markets. The organisation is seeking to boost Saudi Arabia’s coffee production from 300 tons per year to 2,500 tons annually.
World Coffee Portal research shows Saudi Arabia’s branded coffee shop market grew 18.5% in the 12 months ended November 2022 to reach 3,556 outlets, making it by far the largest in the Middle East.
The 2007 International Coffee Agreement, the last iteration to be ratified by the ICO, included 42 exporting member nations and seven importing members, comprised of the European Union’s 27 countries alongside Japan, Norway, Russia, Switzerland, Tunisia and the UK.
In February 2022, Africa's second largest coffee producer Uganda withdrew from the agreement, citing unfair tariffs and restrictions on its coffee exports.
Uganda became the second coffee producing nation to withdraw from the agreement after Guatemala in 2020. Importing nations Turkey, the US and Paraguay also withdrew from the agreement in 2017, 2018 and 2019 respectively.