Coffee is imported from various countries such as Brazil, Vietnam, Columbia, Indonesia, Mexico, India, Ethiopia, Guatemala, Honduras, and Peru. These countries happen to be the top ten green coffee producers of the world.
The two types of coffee plants most widely cultivated are grown in tropical and subtropical regions. Small, often family run, coffee farms in developing countries account for roughly 70% of the coffee supply production. The coffees are traded separately based upon the type of processing it has undergone; whether the wet or dry method. More than 80% of coffee produced is traded internationally and is available to buyers either directly or in markets. International coffee traders have two methods of selling – either direct to a roster, or through a broker.
Below is an illustration of the coffee value chain.
“Coffee producers are facing sustainability challenges on social, economic and environmental fronts.” They face difficulties such as inadequate access to infrastructure, financial and market resources. The social well-being of farmers, plantation laborers and their respective communities are being directly impacted by declining coffee prices. Coffee-producing countries earn very little from the sale and export of their produce, and large shares of the profits within the coffee supply chain go to a middleman or the large roasters.
International coffee trading companies invest in operations in coffee-producing countries to help meet the needs of major roasters, who in turn make profits from roasting the coffee. A strong brand strategy, product development, and low-priced green coffee have contributed to considerable profit margins. While there are only a handful of companies which control this trade, the success of the Fairtrade movement has been paramount in roasters beginning to take an interest in coffee production standards, as well as adopting credible codes of conduct – making it nearly impossible for the world’s largest multinational roaster to deny the problems seen in the beginning stages of the coffee chain.
Recognizing the importance of fairer coffee trade and making the necessary changes to support maintain the future sustainability of the coffee market; which millions of people are dependent upon. Through economic viability for coffee farmers, environmental conservation, and social responsibility – certified coffees are paving the way. Companies must take responsibility for their actions and be held accountable for the consequences of their operations; from the trader to the exporter to the roaster, on through to the retail market.
Even the small, locally owned coffee shop manager who thinks international business plays no part or has no bearing upon his operations must realize he too has a level of responsibility in helping uphold the social, ecological and economic consequences of his respective role within the coffee service delivery chain. Educating himself on the coffee value chain and ensuring his suppliers comply with international labor regulations and workers’ rights would be a start toward becoming a more responsible, accountable business manager.
“Globalization impacts every aspect of the coffee industry. International laws regulate the industry and try to prevent price spikes and dips. Major corporations try to shape the market and influence which beans are grown and how they are processed. Farmers around the world are joining cooperatives, often funded and supported by international NGOs, to obtain better prices for their crops, as well as gain needed social services for their communities. Not all of the impacts are positive though, environmental degradation and greedy commodity traders can certainly hurt the industry and its supply chain.”
Tropical Commodity Coalition
Cup of Joe: Globalization and Coffee
