History of International Coffee Organization

In the 19th century, coffee became an important commodity in the international trade market. For a long time after that, the coffee market was often in a state of oversupply, low prices, and occasional price increases in short supply, but for a short period of time.

During the economic crisis of the 1930s and during World War II (1939-1945), the coffee market saw an increase in supply, a decline in demand and low prices. But in the first few years after the war, the demand for coffee increased, exceeding the supply capacity of the market. Between 1950 and 1953, coffee stocks fell below the minimum required by normal trade, which was exacerbated by the outbreak of the Korean War, the drought in Brazil and the ensuing frost. In 1953, the price of coffee rose to an unprecedented high, which led to the massive planting of coffee trees and the overproduction of coffee around the world. In the late 1950s and early 1960s, coffee stocks increased and prices fell sharply. In the face of this situation, governments take the initiative to take measures to stabilize the coffee market and stop the decline in coffee prices. Because the price drop has serious economic and political consequences for many coffee-producing countries in Latin America and Africa.

After the International Coffee Convention of 1962 and the International Coffee Convention of 1968 signed a series of short-term agreements between coffee-producing countries, a coffee research group was established to discuss how to make coffee exporters and importers reach a convention on coffee. The United Nations International Coffee Convention was reached in New York, followed by a five-year 1968 Convention. These two conventions put forward the concept of quota system. Accordingly, when the supply of coffee on the market exceeds the consumption demand, the surplus coffee will not be on the market. In addition, the treaty also produced coffee production and diversification provisions to limit coffee supply as the goal of limiting coffee supply, while coffee promotion activities followed to increase coffee consumption.

The operation of these conventions made coffee prices relatively stable from 1963 to 1972, and coffee production and consumption also achieved a balance. Coffee conventions played a great role in promoting the economic development and international trade cooperation of coffee-producing countries.

Changes in supply and demand patterns led to a rise in coffee prices and the collapse of the quota system in 1973. All economic provisions in the 1968 Convention were abolished. The Coffee Organization continues to serve as a centre for the collection and dissemination of information on coffee, while it is also continuing its efforts in a forum to negotiate a new convention.

The 1976 International Coffee Convention was negotiated in 1975, which was very different from the situation when the first two conventions were concluded. When the first two conventions were reached, there was an oversupply in the coffee market, which led to a drop in coffee prices, and in 1975, Brazil, the world's largest coffee producer, suffered a severe frost, so there were fears that the world coffee market would be in short supply in the near future. this doubt caused the price of coffee to rise sharply. This has affected the member states of the coffee organization. Therefore, when negotiating the 1976 Convention, States not only retained the effective provisions of the previous two conventions, but also introduced some new provisions to strengthen the role of the organization.

One of the main features of the 1976 new convention is to allow the quota to be terminated when the price of coffee is too high and to be re-cited when the price is low. Under this system, the quota system was introduced in 1980. The experience gained in the implementation of the 1976 Convention laid a good foundation for the negotiation of the fourth Convention, which entered into force in 1983.

The 1983 International Coffee Convention has the following main economic characteristics:

1. When necessary, adopt an export quota system to ensure price stability within a certain range. This scope is reached annually through consultation between members of the organization's coffee importers and exporters at meetings of the International Coffee Council.

two。 When the price of coffee rises above a certain level, the quota system will be terminated, and when the price falls, the quota system can be brought back into effect.

3. In setting individual quotas, consideration should be given to the past export performance of coffee-exporting member countries as well as to coffee stocks.

4. The export quota system is supported by a system of mandatory binding force. Each coffee export of each member country is accompanied by a certificate of origin. Unless the coffee export mark issued by the International Coffee Organization ensures the validity of the certificate, the coffee importing country will not be able to accept coffee from the exporting country. When the quota system comes into effect, coffee importing countries must limit the amount of coffee they import from non-member countries. At the same time, coffee exports from coffee-exporting countries to non-member countries will also be closely controlled.

5. The coffee stocks of each coffee-exporting member country are verified annually and the verification must involve all coffee warehouses throughout the country. This work is carried out at the last stage of the annual harvest.

6. The Coffee Council needs to coordinate national production policies to achieve a reasonable balance between coffee supply and demand in the world.

7. The Convention also sets up a fund raised by coffee-exporting countries to promote coffee consumption. This includes coffee promotion activities in major coffee-importing countries, and sponsorship of research and research on coffee consumption, and the promotion fund is also used to fund coffee centres, scientific research and training programs to help improve coffee quality and overall image. In the 20 years since the Fund funded coffee promotion activities, coffee exporting countries have contributed about US $100 million to the Fund.

The International Coffee Organization collects and disseminates all data on coffee in order to enable the rapid implementation of the economic provisions of the 1983 Convention and to correct possible imbalances. It is also a research center that studies coffee production, sales and consumption. Statistical information from member countries and control systems is entered into the computer for rapid inquiry and analysis. The Coffee Organization has also established a public database service, Coffee online, which provides extensive information about coffee.

The quota and control system set out in the 1983 Convention continued to play a role until February 1986, when the price of coffee rose beyond the key point. In accordance with the provisions of the Convention, coffee organizations continue to play a comprehensive role in the period of non-quota control. In December 1986, the market price of coffee fell to the key point of restarting the quota and control system. After lengthy negotiations, the quota and control system was restarted on 6 October 1987 and lasted until 4 July 1989. The Council recognized that it was no longer possible to reach a new convention in time on 1 October 1989, when the 1983 Convention lapsed. It was therefore proposed that the governments of member States extend the validity of the 1983 Convention from 1 October 1989 to 30 September 1991, during which the quota and control system would be suspended and the provisions on inventory verification and production policies would be abolished. In addition, the Council decided to stop the activities of the Promotion Fund.

Member States accepted the recommendations of the Council and the 1983 Convention was formally extended. The purpose of the extension of the Convention is to allow time for member States and the Council to consult in order to reach a new convention. During the first year of the role of the extension Convention, members continued to look for solutions to the problems in the operation of the 1983 Convention. They launched a new round of negotiations, and despite the strong political will and constructive spirit of the member states, the negotiations did not bear fruit. In this context the 1983 Convention was extended to 30 September 1992 to allow time for member States to continue consultations to establish the framework of the new International Coffee Convention.

As a result of the decline in coffee prices in 1990-1991 and 1991-1992, the negotiation process of the new convention gained new impetus, and the Council agreed to extend the 1983 Convention until 30 September 1993, at the same time, the Council decided to establish a working group to conduct a comprehensive review and review of all recommendations and comments on cooperation on coffee issues. In addition Coffee established a consultative group to draft a new convention based on a universal export quota system. Despite extensive consultations among all parties it was impossible to reach a satisfactory convention by the deadline of 31 March 1993. Therefore, in June 1993, the Council decided to extend the 1983 Convention again until 30 September 1994, in order to buy time for the conclusion of the new convention. This time, member states are committed to negotiating the establishment of a new convention that does not start with regulating coffee prices. The consultation was successful and the new International Coffee Convention finally entered into force on October 1, 1994.

International Coffee Convention 1994:

Under the guidance of the 1994 Convention, the current areas of work of the Coffee Organization are:

1. Provide a high-level forum to discuss the world coffee economy.

two。 Improve the transparency of the coffee market by collecting and disseminating objective information on the world coffee market, including the release of new "Coffee News" by ⑴ (published in the four official languages of the organization). ⑵ introduced a statistical reading service, and ⑶ partnered with Dow Jones to develop an Internet website on coffee (http://www.icoffee.com/), ⑷ is a brief analysis of coffee distribution in major coffee producing and consuming countries.

3. Realize the role of the established international coffee commodity group and propose coffee development projects that can be funded by commodity co-financing (Common Fund For Commodities).

4. Set up a research project to study issues related to the prosperity of the global coffee industry, such as marketing systems and encouraging consumption.

5. Promote the sustainable management of coffee resources and resource use through activities and enhanced exchanges.

6. Hold a seminar on the current major issues related to coffee.

7. Promote the exchange of information between representatives of member States of the organization and the private sector, which can take place at regular academic meetings among experts, focusing on coffee-related issues, such as factors affecting the coffee market and surveys on coffee and health.

The organization has now won the endorsement of Commodity Co-financing (Common Fund For Commodities) to launch a project totaling US $30 million to address issues related to improving coffee quality, pest control and improving the structure of the coffee market. At the same time, there is a $15 million project in the pipeline. Research in related areas is under way, such as the determination and change of coffee prices, the establishment of organic coffee and the global coffee research network, and lectures on coffee and its impact on the environment. A new organization, the Joint Forum on Coffee Industry and Trade, has been established to allow the private sector to express its views and to involve joint industrial organizations of coffee producing and consuming countries in coffee issues of common concern.

The International Coffee Organization also uses the remaining wealth of the extension funds generated under the 1976 and 1983 Conventions to carry out promotional activities in new markets, particularly in China and Russia, which have great potential for coffee consumption.