Global Coffee trade:

Question 1

Where is Coffee grown ?

Answer 1

• In hot, wet areas close to the equator, as a result coffee production is dominated by South America, Asia and Africa.

Examples of the biggest coffee producers Brazil and Colombia.

Question 2

2 main types of coffee bean:

Answer 2

Arabica - more expensive, mainly grown in South America and around 70% of world coffee production is Arabica.

Robusta - Worse quality, cheaper and mainly grown in Western Africa and Asia.

Question 3

Issues in Coffee production:

Answer 3

• Coffee plants are susceptible to many diseases, which harms the leaves and prevents growth e.g Coffee Berry disease.
• Insects and other pests e.g Black Twig Borer destroys the coffee plants
• Farmers use pesticides and fertilisers which are usually imported so are expensive

Question 4

Coffee is traded Globally:

Answer 4

• Mainly produced in less developed countries and consumed by more developed countries
• Brazil (largest coffee producer in the world) - 2015, exported around 20% of the world’s coffee
• USA (largest importer of coffee) - 2015, imported around 20% of world’s coffee

Question 5

Supply/demand of coffee in relation to the price of it:

Answer 5

• If demand increases and supply stays the same then global coffee prices will increase.
• If supply increases and demand stays the same the price will fall.

Question 6

Coffee trade is Dominated by TNC’s:

Answer 6

• Coffee farmers only sell the unprocessed coffee bean, which is low value whereas TNC’s buy the beans and roast them increasing their value, they receive the majority of the profits
• TNC’s mainly based in developed countries , so the profits go there rather than being reinvested into LIC
• TNC’s have lots of control over the market - just 4 companies control around 40% of global coffee exports.

‘Race to the bottom’ - Where coffee producers compete with eachother to offer the lowest prices so the TNC’s buy from them by cutting wages e.g

Question 7

Fairtrade Coffee campaign (1992):

Answer 7

• Fairtrade Minimum price, aims to prevent coffee farmers from going out of business or falling into poverty.
• Works to maintain environmental standards and prohibit forced and child labour.
• Number of fairtrade producer organisations grew from 175, in 2002 to 329, in 2011. Saw global sales of fairtrade coffee grow from around 15, 000 tonnes a year to 80,000 tonnes a year.

Fairtrade premium = paying additional money into a communal fund for local communities to help them develop