Coffee

Question 1

What are the global trade patterns in global coffee (total rev + forecasted growth)

Answer 1

• coffee is the most popular manufactured drink consumed worldwide with around two billion cups consumed every day
• total revenue from coffee in 2023 stood at $95 billion
• forecasts predict that the coffee market is expected to grow annually by 4.47% from 2023-25

Question 2

Coffees importance to the economy

Answer 2

• 33% of worlds coffee bean produced in Brazil
• 56% of US adults drink coffee amounting to 66 billion cups per year
• 25 million small producers rely on coffee for a living

Question 3

Characteristics of the top 10 coffee producing nations (+ who consumes the most)

Answer 3

• majority NEE, predominantly located in South America or Asia (close to the equator), Brazil producing the most
• the top consumers of coffee in the world are in Europe

Question 4

Coffee a complex crop (producers & TNC’s)

Answer 4

• difficult to grow due to specific conditions it requires
• most coffee is grown by small farmers and they sell the unprocessed bean, which is low value and mostly bought by large TNC’s
• the TNC’s roast the beans, increasing their value, thus receiving the majority of the profit
• TNC’s can pick and choose who they buy the coffee from, leading to farmers competing against each other by cutting prices and labour regulations - called ‘the race to the bottom’
• for example, Vietnam is an up and coming coffee producer. By 1999, Vietnam was producing 450 million kg of coffee annually. This caused price to fall dramatically (volatile), from $1.19 per kg in January 2000 to $0.68 by march 2001. This forced many South American farmers out of business
• more than 125 million people around the world depend on coffee for their livelihoods with around 25 million smallholder farms producing 80% of the worlds coffee.
• international coffee trade agreement broke down in 1989 -> no more quotas so free market pushing prices down