Growing coffee will starve to death? The crisis of imbalance between production and marketing between the Tropic of Cancer and the Tropic of Cancer

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In addition to tobacco and alcohol, it is probably difficult for human history to produce a "legal addiction" agricultural product like coffee. Legend has it that the first coffee shop was born in Damascus in 1530 AD, and since then human demand for coffee has continued to grow, and there is no trend of exhaustion, which is an alternative economic miracle. But this lucrative "black gold" market fell on the farmers at the source, and the conclusion was that "growing coffee will starve to death."

The soil between Tropic of Cancer and Tropic of Cancer is the most suitable environment for growing coffee beans. According to Euromonitor, the global coffee industry has doubled in value to $90 billion over the past decade. Consumers around the world are drinking more, but farmers from Peru to Papua New Guinea to Ethiopia to Ecuador are suffering: Arabica, which accounts for more than 60 percent of the coffee market, has fallen to a 14-year low of just $0.90 a pound.

There are two types of coffee beans: Robusta, a hardy, low-quality bean, mostly made into instant coffee; Arabica, a mild, high-quality bean, which is divided into high-altitude beans and low-altitude beans. According to the Financial Times, the price collapse was caused by a surge in Arabica's low-grade bean production, which dragged down the market. For three years, production, processing, and shipping costs were about $1.50 per pound, but the accepted transaction price was only $1.20.

Coffee beans trade for less than the cost of planting, causing many coffee farmers to abandon their fields.

Brazil dominates the coffee market and is the world's largest coffee producer and exporter, accounting for 28% of global coffee bean trade. Local coffee farmers mechanize large-scale farming, specializing in low-quality beans, and can cost less than $0.90 per pound. Last year, Brazil produced a record 62 million bags, converted into 60 kg bags, and a weak currency, providing local players with an export advantage and a market winner. This year's output is likely to continue to record highs.

However, even Brazil's low-cost coffee farmers may lose money on the trend. There are about 8,000 smallholder farmers among the members of large local coffee cooperatives. If trading prices fall again, unemployment is imminent, officials said.

In addition to low-priced beans mass production caused bad money to drive out good money, speculation in the financial market is also one of the culprits causing coffee prices to collapse. The New York Coffee Exchange, for example, has been selling short since 2017, from buyers and sellers of futures to hedge funds, manipulating prices. Brazil's biggest exporter points out that this will create a vicious circle. Coffee farmers cannot afford fertilizer, which leads to a deterioration in quality.

"More and more farmland is turning to wasteland," says Sonia Vásquez, an organic coffee farmer in Honduras."Many people are leaving. Growing coffee will starve." Her harvest has plummeted by nearly a third over the past year, and her income has fallen short of her expenses.

Although prices collapsed far more than the economic crisis in Latin America, farmers abandoned their fields sadly, but consumers did not know anything, and even felt that coffee prices were rising. The reason is that coffee beans cost only 4%, and labor and taxes are the big expenses.

To address the coffee crisis, several multinational companies are providing technology and saplings to farmers and cooperatives to ensure safe supply; Starbucks, the leading coffee chain, is investing $20 million in smallholder farmers in El Salvador, Guatemala, Mexico and Nicaragua; and Nestle, the world's largest buyer, is investing 68 million Swiss francs a year in technology development.

But more and more small farmers cannot live off coffee fields and are looking for buyers. Once they stop growing coffee, the world's billion coffee-drinkers will face an unprecedented coffee shortage.

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