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Coffee home - Coffee articles - Coffee - the global giant

Coffee - the global giant



Coffee - the global giant
The world coffee market today is vast, coffee being the world's second most widely traded commodity after crude oil. World coffee production in 2004 is projected to be around 6.3 million metric tonnes, a reduction from 2003 figures due to stockpiling equivalent to 1.3 million tonnes. Ten years ago the global coffee economy was estimated to be worth some $30 billion, of which producers received $12 billion. Today it is worth around $50 billion with producers receiving a mere $8 billion of that (source Global Exchange, 2004).

Brazil, Columbia and Vietnam are the world's biggest coffee producers, accounting for around half of global production in 2001. Because of the central importance of coffee exports to their economies, a number of Latin American countries made arrangements before World War II to allocate export quotas so that each country would be assured a certain share of the US coffee market. The first such coffee quota agreement was arranged in 1940 and subsequent agreements were renegotiated in 1968, 1976, and 1983. However due to a shift in the balance of production, participating nations failed to sign a new pact in 1989 and world coffee prices have been in free-fall ever since as production continues to outstrip demand, and a "global coffee crisis" ensued.

"Fair Trade" measures designed to help the struggling farmers only account for only 8 million of the 2.6 billion pounds, or 0.3% of the coffee sold annually in the USA. With an estimated 20 million coffee workers worldwide, developing nations have been hit hard by this global coffee crisis as trade prices have fallen short of production costs. New yield technologies in combination with overproduction, especially by the developing economies of Vietnam and the Ivory Coast, have largely contributed to the crisis. The human cost is demonstrable.

In Latin America tens of thousands of farmers and labourers have begun migrating to look for alternative work as plantations close down. This is not the only toll of overproduction however, as the drive for cheaper, faster growing coffee has led to widespread clearance of the forest cover normally associated with high quality blends. In Vietnam alone, which produces around 11% of the world's coffee, nearly 1.5 million acres are now under cultivation causing the clearance of vast areas of forest.



Who are the biggest coffee drinkers?

Just as there are big global producers, there are big global consumers, and all the coffee producing nations combined consume less than a quarter of what they produce. As one might expect, there are wide variations in domestic coffee consumption from one nation to the next. Germans consume around 7 kilos of coffee each a year, the Austrians 8, the Dutch 9, the Belgians 6, the Italians 5, the Danes 10, and the Swedes and Finns a mighty 11 kilos per person, well above the European Union average of 5 kilos per person.

Americans and Canadians consume around 4.4 kilos each a year, and further down the scale the tea drinking Irish and British consume around 1.5 and 2.5 kilos per year per person respectively. Many major coffee producers such as Kenya, the Ivory Coast and Vietnam consume less than 0.2 kilos each a year domestically (International Coffee Organization 1997), suggesting that coffee is largely a cash crop. Europe in contrast consumes over a third of all world coffee production, and North America a fifth, although it is quite interesting to note that coffee consumption per person increases in more northerly climes and during the winter months.



What this translates to at the level of the US economy is 108 million coffee consumers spending an approximately $17.9 billion on coffee annually (SCAA 1999 Market Report). A quick calculation suggests that coffee drinkers spend on average $164.71 per year on their favourite stimulant.

The National Coffee Association suggests that 54% of the adult population of the United States drink coffee daily and 25% occasionally (NCA, 2000). Among actual coffee drinkers the average consumption in the United States is around 3.1 cups of coffee per day. In comparison Italians consume 14 billion espresso coffees annually, and Italians consume approximately 3.7 kilos of coffee per capita and employ over 270,000 as "baristas". The United States imports around 120 million kilos of coffee a month, the Germans 60 million, the Italians 30 million and the British 15 million.

With all these facts and figures it is safe to assume that our coffee consumption has a major effect on our societies and economies. This can only have profound effects upon our health and behaviour, but what are the effects of coffee on our minds and bodies?




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