Coffee in Crisis: How to Take Action

Sep 26, 2018 9:45 AM ET

Coffee in Crisis

Americans drink a LOT of coffee — more than 400 million cups each day. Meanwhile, more and more people across the globe are drinking coffee as consumption grows in China, India, and beyond. This has led to the development of a vast commodity market worth $200 billion each year — one that will at least double by 2050, according to World Coffee Research. So, it may come as a surprise that amidst this prosperity, coffee farmers are facing a crisis that threatens their basic livelihoods.

The Coffee Pricing Crisis

Coffee as a commodity is traded on the New York Stock Exchange where it is known as the ‘C Price’. The C Price serves as a reference point for producers and buyers looking to negotiate, since other factors (such as quality and geographic origin) can drive the final price either up or down. At the end of the day, the C Price is vital for tens of millions of producers looking to make ends meet. Over the last few years, the C Price has gone down, down, down — dropping more than 50 percent from around $2 per pound of coffee in 2014 to less than $1 per pound in late August 2018. This has led to a major crisis for small-scale coffee producers. At this price, they are unable to cover even the most basic costs associated with coffee production. Putting it another way, coffee at $1 means producers lose money with every sale, communities go hungry, and farms are abandoned as farmers seek alternative means of income.

Read the full article at Fair Trade Certified.