Who gains when global coffee prices collapse?
There is as much variety in coffee as there is in wine as consumers are now well aware. Final product markets are beginning to segment and prices spreads are increasing. But who is gaining from the differentiating market – the roasters and retailers in rich countries, the global coffee trading companies or the developing country producers? What can be done to increase the share of these relatively price inelastic product niches for poor producers? Research by the UK Institute of Development Studies explored these issues by examining detailed data on global coffee prices and interviewing key respondents in the corporate and policy making communities. Key findings are that: • Coffee terms of trade have declined over the long-run and are currently less than half of what they were in 1963. • Global prices have collapsed over the past 18 months and producers are being forced off the land and into poverty. • Final customers are becoming more discriminating in their choice of coffee; specialt
