Brewing success: Thai coffee market percolates with growth

The Thai coffee market is experiencing significant growth, driven by evolving consumer lifestyles and increased demand for both domestic consumption and export processing.

The Director-General of the Trade Policy and Strategy Office, Poonpong Naiyanapakorn underlined Thailand’s potential to process raw coffee into finished coffee products for export, a key value-adding practice.

From 2021 to 2023, the Thai coffee market expanded at an average annual rate of 8.55%. In 2023, the market value reached 34.5 billion baht, an increase of 7.34% from the previous year.

Instant coffee dominated the domestic market, with a value of 29 billion baht, accounting for 84% of the market. Fresh coffee accounted for 16%, valued at 5.52 billion baht.

Poonpong attributed the market’s growth to the demand from working-age consumers and a lifestyle that prioritises convenience. The hot climate in Thailand also contributes to the popularity of iced coffee, ready-to-drink instant coffee, and bottled ready-to-drink coffee.

He added that some consumers enjoy the ambience and process of brewing fresh coffee, which also contributed to the growth level. Varied consumer preferences have prompted entrepreneurs to study market trends and adapt effectively to demand.

Coffee imports

In 2023, Thailand produced 16,575 tonnes of coffee, consisting of 48.2% Arabica beans and 51.8% Robusta beans.

Coffee imports in Thailand have been on the rise since 2019. In 2023, the value of coffee imports reached US$338 million (12.3 billion baht), a 12.9% increase from US$300 million in 2022.

The imports included raw coffee valued at US$185 million (62,171 tonnes), roasted coffee at US$27.6 million (1,647 tonnes), and instant coffee at US$126 million (15,947 tonnes).

In the first quarter of this year, coffee imports were valued at US$76.3 million, with raw coffee making up US$31.2 million, roasted coffee US$6.15 million, and instant coffee US$38.9 million.

Thailand imports a significant amount of raw coffee for domestic consumption and to process for export as instant coffee. In 2023, the top export market for Thai instant coffee was Cambodia, followed by Laos and the Philippines.

The largest suppliers of raw coffee beans to Thailand are Vietnam, followed by Indonesia and Laos.

Thai coffee exports have shown continuous growth since 2021. In 2023, coffee exports were valued at US$126 million, a 15.6% increase from US$109 million in 2022.

The export breakdown included US$121 million for instant coffee, US$2.75 million for roasted coffee, and US$2.20 million for raw coffee.

In the first quarter of this year, Thailand’s coffee export value was US$34.2 million, with instant coffee contributing US$32.7 million, roasted coffee US$1.24 million, and raw coffee US$210,000, reported Bangkok Post.