On Rising Coffee Prices
Recently, I’ve seen news that international coffee prices have risen (Shortages stir coffee and sugar prices, Financial Times). This has created worry in some sectors of the industry, especially among the buyers who sell their coffee directly to consumers. At the same time, some believe this means farmers will receive a more equitable price for their coffee. This is not certain, especially since the majority of organized farmers I know sold their coffee months earlier.
The process of running a cooperative requires many managers to accept pre-financing (oftentimes with interest payments) to fund the upcoming year’s crop. This pre-financing often obliges them to sell their coffee at a fixed price. Given that, a decrease or increase in coffee prices in the future doesn’t affect many farmers.
Oftentimes, the intermediaries and coffee buyers know how the market is performing and can make decisions with information many farmers aren’t privy to. In my experience, farmers often lose out or are pushed to the margins by this phenomenon.
And factor in that real, high quality coffee is becoming scarcer due to a number of reasons, including:
- a shift in the optimum zones for coffee cultivation due to climate change,
- increased costs for fertilizer and fuel,
- costs associated with certification processes,
- an increase in competition between producers,
- an increase in the number of countries that produce coffee.
In my experience, an average family should produce at least 40 sacks of coffee for export (under the organic coffee system) to make a dignified – albeit modest – living, but the average family only produces about 8-10 sacks of coffee.
Coffee Kids’ partners work with families to create alternatives to coffee farming that provide year-round income. These alternatives promote, access to education, health awareness and food security and most importantly, coffee-farming families can continue farming coffee without being dependent on it.