Coffee Crisis Essay -- BTEC Business Marketing GCSE Coursework

Coffee Crisis The Wall Street Journal, Boston clod , and the Economist as well as many other media outlets of rule book were all in consensus when they decl bed the onset of coffee crisis in October 2001 farmgate prices had crisply dropped reaching a thirty-year low of $0.39 per pound in This price was on a lower floor the cost of coffee production at the time, listed at USD 0.60 per pound.(Economist 2001) outlay declines are not such an uncommon occurrence, but what is more troubling is that the interchange commercialise for coffee suffers from high price volatility. For a more expound look please see Appendix 1 Cash Price Variation. Coffee producers , who are mainly located in developing countries , are highly vulnerable to price risk in the immediate payment market , yet their profits in relation to their risk exposure has been steady declining. In a 2001 study conducted by the European sensible alternate acquaintance (EFTA)- an organization that promotes the sale of products that ensure price security for marginalized good producers- the general finding was a declining share of trade revenues from coffee remained in the coffee producing countries. Although the international coffee market has grown from $30 one thousand million annually in the 1980s to $55 zillion in 2001, in aggregate coffee producers have seen their share drop from $10 billion to $7 billion in 2001 (Renkema 59). From the perspective of the small producer, their received cash prices have not always been this volatile and had been stable up until 1989 although the information does not fully support this. Please see Appendix 2) Measures of Volatility. A price regime devised in 1962 by the internationalistic Coffee Association setup an agreement between coffee producing countries and coffee consuming countries.... ...//www.nybot.orgPennings, Joost M.E. look for in agrarian Futures Markets Past Present and Future. Presentation Paper Wageningen Agricultural University N etherlands. 8 June 2001. Renkema, David. (2001). Chapter 4CoffeeThe Speculators Plaything Fair look at Yearbook..European Fair Trade Association Amsterdam.World Bank International Task Force on Commodity Risk Management in ontogeny Countries. Dealing With Commodity Price Volatility In Developing Countries A Proposal For A Market-Based Approach. Discussion Paper for the Roundtable on Commodity Risk Management in Developing Countries. World Bank. Washington, DC 24 September 1999. United Nation Commission on Trade and Development (UNCTAD) Secretariat. Farmers and Farmers Associations In Developing Countries And Their Use of Modern Financial Instruments. geneva 10 January 2002.