Coffee Market

Coffee (e.g. Coffea Arabica, C. Robusta) is a drink brewed from the seeds of the Coffea genus.1 Originating in East Africa, the coffee shrub was later cultivated in many tropical and subtropical countries across the world. It was introduced to the now major producing countries Brazil and Colombia in the early 1700s and to Vietnam in 1857. In 2012, 8.2 million metric tons of coffee were produced in over 50 countries on 0.2 per cent of the world’s agricultural area. Over 80 per cent of the world’s coffee production was exported, with a total export value of US$23.4 billion. Estimates of total coffee farmers worldwide have long hovered at about 20 million to 25 million (Lewin, Giovannucci, & Varangis, 2004)2 (see Tabe 8.1, Standard-compliant and conventional key statistics for coffee production and trade.).

Coffee is generally regarded as the pioneering industry for sustainability standards and certification (Reinecke, Manning & von Hagen, 2011). As with many other primary commodities, the global coffee market has been defined by high volatility and long-term declining prices. Notwithstanding international efforts to secure more stability and predictability in the relationship between supply and demand of coffee through the International Coffee Organization (ICO), growing global production, speculation and climatic uncertainty have continued to drive price volatility and long-term price decline within the sector. With coffee production being dominated by smallholder producers in tropical regions, themselves often subject to conditions of poverty and in close interaction with highly biodiverse biomes, the coffee sector has provided fertile ground for the development and adoption of sustainability standards.

 

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1. [Coffee was first cultivated in the Horn of Africa, specifically in Ethiopia, where, according to records, it was consumed by slaves taken from Sudan to Yemen through the port of Mocha (ICO, n.d.). One coffee “cherry” contains two seeds, or “beans.”]
2. [This estimate has been quoted for over a decade; however, it is still relevant given coffee’s extremely stable harvested area (0.3 per cent decrease per annum from 2004 to 2011) (Food and Agriculture Organization of the United Nations (FAO), 2013.]