A Crisis in the World of Coffee Essay

Coffee is not just a drink. It’s a global commodity. Multinational coffee companies now dominate the industry worth over $80 billion, making coffee the most valuable trading commodity in the world after oil. While we continue to pay for our lattes and cappuccinos, the price paid to coffee farmers remains so low that many have been forced to abandon their coffee fields. This conundrum is most evident in no place other than Ethiopia, the birthplace of coffee.

Coffee has not only impacted the world socially, but it provides financial means for many countries who export their coffee beans.

It is a globalised world. Being a part of this progressive society, growth is a key indicator of success. Global Trade is one such benchmark that differentiate nations and economies. Every nation has some policies to promote the strengths of their trade globally. Likewise, Colombia has been known to be the third-largest producer of coffee after Brazil and Vietnam (in terms of volumes produced) from a long-time. Coffee is the world’s most traded commodity and most of it is produced by the small-scale farmers. Hence, globalisation has had a great impact on its production as well as trade. Therefore, Colombia’s strength lies in the production of coffee but also promoting their strengths and honing them globally to their benefit. Coffee is not just a cash crop for the Colombians but it’s a way of life for them. The farmers associated with the credulous society of small scale coffee growers called National Federation of Coffee Growers of Colombia (NFC) (1) was founded in the year 1927.

The strategies that are proposed in this clip for changing this situation are for coffee growers to adapt to the fair-trade market. Under the fair-trade market coffee growers will have the chance to a decent market price that will help increase their production.

Coffee is an important source of income, and it is produced in more than fifty developing countries in Latin America, Africa, and Asia . Moreover, requiring the labor to be intensive is the reason behind the initial production of coffee beans that includes farming, collecting, and processing, being performed in developing countries.The labor in the developing countries is more abundant to the circumstances necessary for the initial production of coffee. However, The roasting and branding of coffee is more capital intensive, and therefore is it is done in northern industrialized countries( COFFEE VALUE CHAIN & P3G ANALYSIS, n.d).

There are many essentials that are fetishized by Americans; one of those things is coffee. It is no secret that there is a big demand for coffee with many specialty coffee shops springing up, such as Starbucks, Peet’s and Coffee Bean. Oftentimes, the consumer loses sight of where things come from and how they are produced. A key component of production is the producer. The consumer does not pay enough attention to the ethical treatment and wages of the producer. This paper discusses Karl Marx’s premise on Fetishism of Commodities and its direct relation to the production of coffee, focusing on the value of the coffee bean as well as how that directly impacts the farmer and his family.

We can understand the relation between commodity and trade development through the study of coffee and it’s origins. Over about 90% of coffee is produced in the South, and consumed in the North. Or a long time Latin America has provided most of the world’s coffee. Coffee comes from a cherry produced by a tree that requires a warm climate without any sudden temperature shifts or frost and it needs plenty of rain. This climate is ideal for coffee between the tropics of Cancer and Capricorn. During the movement of coffee from harvest to export the first step is to separate the coffee bean from the skin and the pulp of the cherry, this results in what is called “green” coffee. Before it is exported the coffee is cleaned and sorted into lots that have different quality attributes, something like the grain elevators. The lots vary as they go from country to country based on the size, the shape shape and the deficiencies it might have or the way it is processed. At this point in the process the coffee still has it’s individual quality and value.

Imaging if there was no more coffee in this world, how would you feel? Nowadays, coffee becomes an important part of people’s life. People who often work overtime, they drink coffee because caffeine can make you awake; people who have to wake up early in the morning, they drink coffee because instead of making breakfast, coffee is more convenient; people drink coffee during the free time, because it also tastes good.

Seeing someone holding a cup of coffee on the street is not seen as unusual at all nowadays. In fact, they are starting to get more common. There are now different varieties to choose from. Shops or cafes also provide a lot of different choices or products to consumers. Prices could be ranged from low to high, depending on what type of coffee beans you have chosen to make the coffee.

Assuming that the demand and supply for premium coffees are in equilibrium, the price will be at a constant, without significant pressure from the market. If Starbucks introduced the world to premium blends, this would cause a positive shift in the demand curve. There a higher equilibrium price and higher quantity when demand increases and supply remain unchanged. As prices increase, and the market moves to a new equilibrium, we will see higher wages, more advances and investments in technology and infrastructure, and greater competition. As production become more efficient and competition becomes greater, supply will increase and cause prices to settle back down. There are several factors that will impact the long-term equilibrium, such as changes in supply. For example, if a hard freeze eliminated Brazil’s premium coffee crop, this would cause a negative shift in the supply curve. Assuming demand remains constant a negative shift in the supply curve will cause quantity to decrease and equilibrium price to increase. Research shows that in 2011 a frost occurred in Brazil's southeastern coffee growing belt. Traders worried that next year's yields could be hurt. At the same time, heavy rains during harvest forced Columbia to reduce its crop estimate for 2011. Understanding the impact of problems along the supply chain and how the changes in supply

Around one hundred and twenty five million people are dependent on coffee, making coffee the most valuable and widely traded tropical agricultural product. It is also one of the highest earners in the market with a worth of $70.86 billion dollars, therefore it is highly tradeable but it is largely investing into global poverty due to the rural coffee farmers earning such a small percentage of the overall profit. (Foundation, F. (n.d.). Fairtrade International. 2015) There are over seventy countries producing coffee but over eighty percent of the worlds coffee is only being produced in four main states which are Brazil, Colombia, Vietnam and Indonesia. With

Coffee is a beverage that is globally consumed, but also a product that has different values in different parts of the world. The role coffee plays in society differs around the world, from the farmers who grew the crops to the people who constantly consume them. Social theoretical perspectives are capable of showing the different roles coffee has in different societies. Symbolic interactionism, functionalism, and Marxism are three theories which show coffee’s role sociologically. These theories show how coffee affects people physically, how it affects them emotionally, how it leads them to have interactions, how it connects different parts of society, and how it’s economically controlled by a select few.

The Keurig case study is an interesting examination of the revolutionary coffee company, and the variables that will shape the future of the company and industry. The basis of the Keurig case study is the transition for niche product aiming for the mainstream success of everyday use by consumers in their homes, to one of the industry leaders among the coffee industry giants. “Keurig had been founded to commercialize an innovative technology that allowed coffee lovers to brew one perfect cup of coffee at a time” (Hitt, Hoskisson, & Ireland, 2016, p.C-87). Hence, the attempt to create a new segment within the coffee industry would take time, and education efforts to promote and sell the benefits of the new coffee makers. After 11 years of trying to perfect the desired product the company believed could change the industry, Keurig was able to develop the K-cup.

Lately, coffee has been in all its glory. Being more popular than ever, with pumpkin spice lattes, morning coffee runs, and debates on which shop offers the best cup of coffee. No one ever seems to gain interest in how coffee was discovered, who discovered it, who invented coffee machines, and how those were invented. There is no limit to the history behind all these questions. Coffee has been around for centuries, and has changed history to say the least.

Coffee is something that people around the world drink daily. Coffee affects people's daily life, many need it everyday to wake up. Coffee creates an addiction, something that can’t be stopped by any drink. Coffee is made differently around the world, some people drink coffee made in a french press some drink it made in a regular coffee maker. The tastes are very different when they are made in each machine as well as the length of time it takes to make the coffee, the cost, and the control you have over the taste. Coffee is smoother and bolder when made in the french press and lighter and has a kind of harsh taste when made in a coffee maker. Another way coffee can be made is with instant coffee, this has more of a water taste than a coffee taste.