The coffee growers are roaring! Coffee is getting more expensive, but farmers are getting poorer!

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Coffee is becoming more and more expensive, while coffee farmers are getting poorer, causing coffee growers around the world to roar, warning that Western coffee producers may trigger a new wave of "social disasters" if they do not help them improve their incomes.

■ Growers around the world have warned coffee company executives in the West of a growing "social catastrophe", unless they can help to raise farmers' incomes.

Gafeto Gardo, who has run coffee farms here for generations in the lush southern highlands of Ethiopia, is wondering whether to end coffee farming.

The price of coffee beans plummeted.

Over the past year, the price of coffee beans produced by Gofeito has fallen 1/3 per kilogram to just 29 cents. In Western countries, a cappuccino can sell for $3 to $4.

"We are losing hope," he admitted. As the harvest is not as good as it used to be, I am worried that it will have a great impact. " He said that coffee here "equates to our lives."

Unlike producers of commodities such as oil or gas, coffee farmers have long suffered from being at the wrong end of the value chain. They usually earn only a fraction of the retail price of coffee.

Now, as global coffee bean prices have plummeted to a nearly 13-year low, some coffee farmers in Central America, Colombia and Ethiopia are beginning to question whether they are still worth the hard work.

Desalegan Demissie, head of the joint development office at Shebedino, said growing coffee was "originally a labour-intensive and expensive industry", but now the sharp drop in the price of coffee beans has made him worry about whether it will trigger a wave of abandonment of coffee farmland.

Ironically, at the other end of the value chain, coffee has become an unprecedented popular drink. Western millennials grew up drinking Starbucks coffee from an early age, which also led to the rise of coffee shops in Europe and the United States one after another, and creative coffee specializing in high-end routes was born accordingly.

Due to the amazing business opportunities in the coffee market, the industry has also set off a new wave of mergers and acquisitions, such as Nestl é's acquisition of the global marketing rights for Starbucks products outside Starbucks coffee shops; JAB Holdings spent a lot of money to acquire Green Mountain, and Coca-Cola spent a lot of money to acquire coffee chain Costa, hoping to expand its presence in the coffee market.

But for coffee farmers who are struggling for a living, their future is in gloom. This has also prompted coffee farmers around the world to come forward and ask Western coffee makers to help them raise their incomes, otherwise they will trigger a new social disaster crisis.

Coffee fields are in danger of abandonment.

A group representing coffee farmers in more than 30 countries wrote publicly to coffee producers such as Starbucks, Jacobs Douwe Egberts and Nestl é in 2018. The letter mentions that coffee fields are currently facing a crisis of abandonment and warns that if this happens, it will cause not only social and political unrest, but also more illegal immigrants.

The coffee industry also responded kindly to the letter. Starbucks has pledged $20 million to help minority shareholders trade with Central America until the price of coffee beans returns above the cost of production.

Starbucks, which buys about 3 per cent of the world's coffee, said: "this is a first step for us to know that we have to do something that meets the most urgent needs of these countries in the near future."

The recent collapse in global coffee bean prices is mainly due to a bumper harvest in Brazilian coffee fields. The country is the world's largest coffee producer, and its bumper harvest led to a low price of Arabica coffee beans on the ICE Futures Exchange in New York and the United States.

On September 18, 2018, for example, the price of Arabica coffee beans fell from $2.09 per kilogram to just 95.10 cents per kilogram, the lowest since October 2005, and less than 1/3 compared with the 2011 high. Coffee bean prices are still hovering near lows and there is still no sign of a sharp rebound.

Source: industrial and Commercial Times

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