Global Coffee trade

Question 1

Where is Coffee grown?

Answer 1

Coffe grows in hot, wet areas close to the equator. As a result coffe production is dominated by countries in south american, the caribbean, Asia and Africa. The biggest Coffee producers are Brazil, Vietnam, colombia and ethiopia.

• Coffee plants are grown in nurseries and after 6 to 12 months they are moved to farms where they produce the beans that are used to make coffee.

Question 2

Issues in Coffee production

Answer 2

• Coffee plants can be susceptible to a range of diseases, for example bacterial blight and coffee leaf rust, both of which harm the leaves and prevent growth,
• Coffee farmers have to look out for insects and other pests, for example the black twig borer is an insect native to Asia that tunnels into the branches of coffee plants and destorys it.
• Diseases can be spread in particulary wet weather and droughts make pests more likely.

Question 3

Coffee Exports

Answer 3

• Exported by less developed countries.
• Brazil is the largest coffee producer in the world, in 2015 it exported around 20% of the worlds coffee, it has around 300,000 coffee farms and produces around 2.5 million tonnes per year.

Question 4

Coffee imports

Answer 4

• Generally imported by developed countries
• The USA is the largest importer of coffee in the world, in 2015 it imported around 20% of the world coffee, Euro counties and Japan, russia and canada are also important coffee importers.

Question 5

Price volatility/Fluctuations

Answer 5

• Very volatile, effected by signifcant supply shocks, this effects the producers.
• The amount of coffee exported from Vietnam has increased steadily since 1987, by 1999 they were exporting over 450 million kg of coffee per year which cause the price to fall dramatically, from $1.19 per kg in january 2000 to $0.68 per kg by march 2001, this resulted in many south american coffee producers going out of business.

Question 6

TNCs and the Coffee trade

Answer 6

• Only around 7-10% of the price of coffe brought to supermarkets goes to coffee farmers, because coffee farmers only sell the unprocessed bean, which is of low value. TNCs buy the bean and roast them, increasing their value and therefore they recieve majority of the profits..
• This means profits go to TNCs in developed countries and cannot be reinvested in developing countries.
• Small scale farmers have little power to dictate prices, in contrast TNCs have signifcant control over the global market. Just 4 companies control around 40% of global coffee exports. This includes VOLXAFE and ECOm
• Coffe producers compete with each other to cut wages and labour regulations and enviromental protection in order to attract TNCs, this is know as ‘Race to the bottom’.

Question 7

Fairtrade coffee campaign

Answer 7

• In 1992 the Fairtrade Foundation was set up to promote brans that support coffee farmers.
• They work with producer organisations, its includes setting a fairtrade minimum price, the minimum price a coffee buyer has to pay the producer organisation to cover its farmer costs.
• Maintain enviromental standards.
• Global sales of fairtrade coffee has risen from 15000 tonnes to over 80000 tonnes per year.