Economics

All about the Coffee Industry

Worth over $20 billion today, coffee farming and export are integral parts of the economy of many countries in South America, Africa, and Asia.

5. Description

Coffee exports is a $20 billion dollar industry making it the second-most-traded commodity, mostly consumed by industrialized nations while being produced by less developed nations. It has a long and overarching commodity chain that involves production, exporting, importing, roasting, distribution and retail. After harvest, coffee is either purchased from farmers by middlemen, or directly exported by large coffee estates and plantations. Coffee is then commonly sold to transnational coffee processing and distributing companies at the standard rate set by the international agency, New York Coffee Exchange. The industry is vital to the politics, survival and economies for many developing countries. It is an industry monopolized by large transnational corporations and chains.

4. Location

Coffee is usually produced in developing countries and imported by developed countries. There are three major kinds of coffee beans, robusta coffee, green coffee and Arabic coffee, each has different smell and flavour. Robusta coffee is widely grown in western and central Africa, southeast Asia, and Brazil. Brazil was the world largest green coffee producer, followed by Vietnam, Indonesia, and Ethiopia. Arabica coffee, on the other hand, are commonly produced in Latin America, eastern Africa, Arabia, and Asia. The world's top coffee importers, on the other hand, are the US, Germany, Italy, France, Japan, Belgium, Canada, Spain, the UK and Austria.

3. Process

The planted raw coffee fruit starts to produce flowers several years after being planted, and harvests of coffee cherries, the useful part of the plant, usually takes place five years after planting. Coffee cherries will then be picked, and the useless parts will be removed. Then the coffee bean will be picked from what is left of the fruit and be cleaned and sorted. Processed coffee beans will then be graded and categorized based on their sizes, locations of production, and taste. Companies will purchase their desired forms and kinds of beans to sell and transport. When coffee beans reach distributors and cafes, they will then be roasted before being served to customers.

2. History

The coffee industry has a long history that can be traced as far as 15th century, when Ethiopia, the origin of coffee, exported coffee to Yemen. The coffee trade soon expanded to Egypt and the Ottoman Empire. With the growing of trade between the Republic of Venice and the Ottoman Empire, coffee was introduced to Europe, spreading to England, France, Germany, Austria and the Netherlands. With European colonial expansion, coffee was introduced to the Americas and Asia, and soon became an important industry in various colonies, especially in South America and India. The coffee industry also spurred slavery in South America. Today the leading coffee producing countries are still on the South American continent.

1. Regulations

The coffee industry has caused many environmental and ethical problems and international regulations have been set up to oversee the industry. Historically, the industry was notorious for being responsible for the expansion of slavery. Today, because coffee is mostly produced in developing countries where working conditions are unregulated, child labour abuses and exploitations of farmers in the process of trading is still very common. International human rights groups have called for more regulation and they call for people to opt for fair trade coffee. Moreover, the mechanization of coffee farming has caused deforestation, soil and water degradation, and habitat destruction. Environmental activists have called for a return to more traditional ways of growing coffee.

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