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The Economics of Coffee

Bob Morris, on Oct 4, 2009, 4:20 pm

coffee in cup

Coffee is the second most valuable traded commodity, right behind oil (petroleum), in North America and Europe coffee consumption is about one third that of tap water. The annual global retail sale is 70 billion dollars but the producers of coffee only receive 6 billion of that. Where does the leakage occur?

Most growers have small farms and are having trouble surviving because the vast bulk of the profits goes to middlemen and roaster while they have little protection against being low-balled on price.

Tags: | Category: News | 4 comments - (Comments are closed)

  • http://homelessonthehighdesert.wordpress.com/ Ten Bears

    Haven’t had a cup of coffee in ten years.

    Wish I could say that about nicotine.

    Green Tea, dude, green tea.

    • http://polizeros.com Bob Morris

      I drink lots of green tea too!

  • http://www.coffeeratings.com/ greg

    I’m not sure the point of this post. One could say you’ve simply regurgitated factoids already posted 26.5 million times on the Internet ( i.e., if we are to believe Google: http://www.google.com/search?q=Coffee+second+to+oil ).

    For example, how about telling us something about the cost of living in the respective producer and consumer countries — such as what it costs to ship the beans from the farmer to a port, and what it costs equivalently to ship it from the consuming country’s port to the point of sale? And the same for storage costs, the costs of dock workers in the respective countries, etc.

    Then we have a chance of maybe actually learning something about this subject rather than talking in circles about it.

  • http://www.coffeeratings.com/ greg

    Actually, as a second point, I co-authored a book a decade ago. I received less than 5% of the profits. And yet that is not uncharacteristic of a lot of published authors who aren’t among the best-seller set.

    That’s even more leakage than your coffee example. But why no posts on the economics of publishing?