The World Coffee Market

As i was sort of on the theme of the world economy, imports and exports and that sort of thing i thought i'd bring you this little snippet which i found quite interesting. Basically it's a bunch of facts about the world coffee market. Roughly 10 years ago the world coffee economy was worth $30 billion, $12 billion of this the producers received. However, nowadays the world coffee economy has grown and is worth roughly $50 billion, yet only $8 million goes to the producers. I sense some injustice here. It just goes to show how these big multi-national companies who have expanded globally have effected the lives of the basic producers. Obviously a lot is being done with 'fair-trade' and the like, but it will still take a lot to return the coffee market back to how it was with the producers, the ones putting the most effort into making the coffee, getting a larger cut of the proceeds.

Coffee is the worlds second most traded commodity, falling just behind oil. I thought that was staggering, very unexpected from my point of view. 60% of the coffee is produced in Latin America and 70% of the coffee is produced on farms of less than 12 acres. We can infer from this that the majority of coffee is produced by small time farmers working small plots of land, and this just adds to the frustrations regarding the pay for the producer. If the majority of coffee was produced by large scale companies it wouldn't matter so much as earning less isn't the end of the world for them. But when it comes to a poor farmer in Latin America, it makes all the difference!

Over 60 developing countries are involved in the production of coffee, with over 100 million being employed in the industry. Just makes you wonder whether if the producers received even something like 10% more than they currently are, how much the economies of these less economically developed countries would improve. It's not even a stable market either, making it all the more worrying and fascinating at the same time. The price of raw coffee can fluctuate by up to 40% in one year. Worrying from the point of view of the farmers in Latin America who have no stable income, but fascinating from the point of view of a market economist looking at how and why the price fluctuates and why by so much! Interesting. What are your thoughts?

Little ramble with something that was on my mind, i found the coffee market very interesting so expect a longer, more thought out post in the near future when i find time. Think about where your money is going next time you buy your coffee beans too! Thanks for reading.