Bitter Coffee: How the poor are paying for the slump in coffee prices

Abstract

Like millions of other vulnerable farmers and labourers involved in coffee production, his livelihood has been devastated by a collapse in international prices. Today, world prices for coffee have fallen to their lowest-ever level in real terms. Failure to reverse current trends will have devastating consequences across the developing world. The price slump has created some winners. Transnational companies and 'designer coffee' retailers are posting record profits as the price of their main raw material slumps. Over the past three years the export price of coffee as a proportion of the retail price has fallen by half, to less than seven per cent. This is good news for some. As a recent Nestlé document on its coffee-trading performance states: 'trading profits increased ... and margins improved thanks to favourable commodity prices.' The bad news is that corporate gain is consigning some of the world's poorest and most vulnerable people to extreme poverty.

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