Economic Aspects of Coffee

Coffee is one of the world's most important primary commodities; it ranks second only to petroleum in terms of dollars traded worldwide. With over 400 billion cups consumed every year, coffee is the world's most popular beverage. Worldwide, 25 million small producers rely on coffee for a living. For instance, in Brazil alone, where almost a third of all the world's coffee is produced, over 5 million people are employed in the cultivation and harvesting of over 3 billion coffee plants. The collapse of price support schemes in the 1980s and the entry of new producing countries (notably Vietnam) has led to world prices for raw coffee beans fluctuating wildly, reaching an all-time low (in constant dollars) in 2002.[4]

Ironically, the decline in the ingredient cost of green coffee, while not the only cost component of the final cup being served, was paralleled by the rise in popularity of Starbucks and thousands of other specialty cafes, which sold their beverages at unprecedented high prices. According to the Specialty Coffee Association of America, in 2004 16% of adults in the United States drank specialty coffee daily; the number of retail specialty coffee locations, including cafes, kiosks, coffee carts and retail roasters, amounted to 17,400 and total sales were $8.96 billion in 2003.

Fairtrade labelling is becoming more popular in many developed countries, allowing consumers to ensure that co-operative producers receive a viable minimum price for their goods.