Coffee: An International Commodity
- Created by: GJackson
- Created on: 13-05-18 16:59
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- Coffee: An International Commodity
- Background
- Been on the international market since the 1800's
- Challenges with changes in climate, price volatility and increased consumption.
- Post 1990
- Introduced to the free market 1990 - Subject to supply an demand
- Prices down by 1/3 between 1960-2001
- 34 year high in 2011
- Impact of free trade
- Prices fluctuate greatly due to growth in supplies
- There are 4 main coffee companies
- Mondelez International
- Nestle
- Proctor and Gamble
- Hillshire Brands and D. E Master Blenders (Douwe Egberts)
- Mondelez and D.E master blenders have since merged to become JACOBS DOUWE EGBERTS
- Vietnam is now a major producer
- Exports - 1963>45 million bags 2012>144 million bags
- World Production
- South America
- 46% of global production
- 75% of trees have a 2 year cycle
- 2012-2013 leaf rust caused 2.7 million bags to be lost
- Africa
- Negative growth of production over last 50 years
- Economic liberalisation has caused a decline of yields
- Before the free market African countries were guaranteed exports to the EU
- South America
- Global Consumption
- 14/20 of the top consumers are European
- Brazil consumes 5.2kg per capita per annum and produces 38 million bags per annum
- 80% of UK households buy instant coffee
- Worlds 2nd largest import after oil
- Specialty coffee is becoming more popular as instant declines
- Challenges
- Price fluctuations cause uncertainty for producers.
- Labour intensive industry - costs rising due to younger workforce.
- Coffee trees are vulnerable to pests (leaf rust and coffee berry borer)
- Socio-economic Impacts
- MEDC's have greater access to market
- Workers in the LEDC production companies have poor wages due to price competition
- Wealth increases in countries that process and refine the product .... and decreases in agricultural countries.
- Background
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