The Global Coffee Trade Flashcards
What are the conditions needed for coffee to grow and how does this affect the countries it’s produced in?
Hot wet areas near the equator
Coffee production is dominated by countries in South America.
What are the 4 issues of coffee production?
-Coffee plants are susceptible to a range of diseases which prevent growth.
-Coffee farmers have to look out for insects as they destroy the coffee bean.
-Hot weather can make the spread of disease and pests more likely.
-Fertilisers and pesticides are expensive.
Who is the largest coffee producer?
Exports 20% of the worlds coffee producing 2.5 million tonnes per year.
Who is the largest importer of coffee?
The USA imports 20% of the worlds coffee.
How does supply and demand affect the price of coffee?
If demand increases but supply remains the same = costs go up
If supply is more than demand = costs go down
Why does coffee prices fluctuate?
When coffee price is high suppliers will produce more coffee causing the price to fall.
Give an example of the fluctuations of coffee prices.
Exports from Vietnam:
1999: $1.19 per kg
2001: $0.68 per kg
Many coffee growers went out of business as they couldn’t afford to produce it at such a low price.
How much of the the price of a coffee bought goes to the farmers?
10%
What do TNCs do to the coffee bean?
They buy unprocessed beans and increase their value by roasting them and selling the processed bean to consumers.
Why is the TNCs taking most of the profit a problem?
The profits go back to developing countries rather than being reinvested in developing countries.
How is their inequality of influence in the global coffee trade?
Coffee producers are small scale with little land who depend on selling beans so they have little power to dictate prices.
What is the race to the bottom?
When TNCs pick where they buy coffee beans from at the lowest price to compete with each other.
How does the race to the bottom negatively impact coffee producers?
Can cause coffee farmers to go out of business.
What is the environmental issue of coffee production?
Intensive farming creates monocultures leading to the loss of wildlife habitats and biodiversity.
When was the coffee fair trade foundation set up?
1992
