International Coffee Trade

Table of Contents

Traditional Coffee Producers....................................3

Brazil................................................................................4

Colombia...........................................................................4

Costa Rica..........................................................................5

Jamaica..............................................................................5

Ethiopia.............................................................................6

Emerging Low Cost Producers...................................7

Vietnam.............................................................................7

Overview of the Global Coffee Market.........................9

What Caused the Crisis ..........................................12

The Breakdown of the International Coffee Agreement....................12

The Fair Trade Movement......................................................16

Will the Quotas Work Again...................................................18

The New International Coffee Agreement Brings Hope...20

Encouraging Numbers...........................................................21

Conclusions.........................................................24

References...........................................................25

Traditional Coffee Producers

Coffee is produced in many countries around the globe. There are two cultivated species of the coffee tree - Arabica and Robusta. Coffee trees produce their best beans in high altitudes in a tropical climate where there is rich soil. Such conditions are found around the world in locations along the Equatorial zone, between latitudes 25 degrees North and 30 degrees South.

A lot of factors affect the quality and flavor of coffee, such as the variety of the plant, the amount of rainfall and sunshine, and the altitude at which the coffee grows.

Higher altitudes usually mean better quality coffee.

These factors along with the way the cherries are processed after being picked contribute to the differences between coffees from growing regions and countries worldwide.

Figure 1 Coffee producing countries

Note:From www.nationalgeographic.com/coffee/map.html

Brazil Nowadays, Brazil grows approximately 52% of the world\'s coffee, but only Santos is considered important by the specialty coffee industry. Under the quota system imposed by the International Coffee Organization the quality of coffee produced in the country was significantly lowered. Farmers did not have an incentive for producing better quality coffee and their only concern was to meet the quota. Rio, is also well known for its' taste, and is used in the popular chicory New Orleans coffee. Bourbon Santos is Brazil\'s finest grade of coffee, and the beans from the arabica trees. An interesting fact is that as the trees age, the beans become larger and lose quality. Two major frosts in 1994 raised prices worldwide. Both arabica and robusta are grown, though in different coffee growing regions. The climate, soil quality and altitude are the factors that determine which sort will grow best in whichregion ("Brazilian Coffee").

Colombia The coffee crop is very important for the country and the fact that all cars entering Colombia are sprayed for harmful bacteria shouldn't be a surprise. Rough terrain makes it difficult to transport the harvested coffee beans to production and shipment centers. Even today, transportation needs to be done by mule. Columbia is known for its' mild coffees, with a well-balanced acidity. Bogota is considered one of Colombia\'s finest coffees ("Coffee growing countries").

CostaRica Costa Ricans grow only Arabica because of an existing law banning the cultivation of Robusta. The cultivators are mainly small farmers organized into co-operatives which form a federation, resposible for exports. Due to use of very up-to-date technologies the yield obtained is extremely high. The most famous coffees are San Marcos di Tarrazu, Tres Rios, Heredia, and Alajuela.

Jamaica The coffee is planted on terraces between 1,500 to 5,000 feet above sea level. It is the home of Jamaican Blue Mountain, one of the world\'s most controversial coffees. Once a superb coffee characterized by a nutty aroma, bright acidty and a unique beef-boullion like flavor. Recent overproduction and lack of quality control led to a mediocre, over-priced product. It was estimated that 10 times more Jaimaica Blue Mountain coffee is sold than is produced. Lured by high prices farmers or buyers would sell coffees of lesser quality under its name. Jamaican High Mountain is a type of coffee of lesser quality that is grown at a lower altitude than Jamaican Blue Mountain . The price per pound nowadays reaches $16. Not all coffee produced on the island is exported. Jamaicans consume a lot of it and also use it to make their world known liquor called Tia Maria ("Coffee growing countries").

Ethiopia

The trade of coffee is Ethiopia\'s largest export, which generates approximately 60% of its total export earnings. Also, the coffee trade is very important to the culture of Ethiopia. Kafa (a province in Ethiopia)