The rise in the price of raw beans leads to a new standard for fair trade coffee

Due to the high price of raw coffee, the International Fair Trade Organization (FLO) raised the minimum price of its coffee and demanded different prices for Fairtrade coffee of different quality.

The price of raw coffee beans, a commodity, is approaching the peak set in 1977. Fairtrade said that while this is good news for individual coffee farmers, some coffee production organizations do not really benefit fairly from it.

Although the price of raw beans continues to rise as a result of poor harvests, some coffee producers still have to honor their previous contracts, Fairtrade said.

Fairtrade has decided to revise its coffee standards to make the supply chain of Fairtrade coffee more stable and to make the market fairer and protect the interests of coffee farmers when coffee prices fall. The contract signed from April 1, 2011 will implement the new standard.

One of the main problems to be solved by the new standard is the underinvestment in coffee farms caused by years of low prices of raw coffee beans. Over the past few decades, many coffee farms have been poorly managed or even abandoned, so Fairtrade's new standards raise the minimum price for Fairtrade, setting aside some of the money to improve farm productivity and quality.

The specific price changes are as follows:

The Fair Trade Development Fund has been adjusted from 10 cents / lb to 20 cents / lb, of which 5 cents is dedicated to farm improvement.

The minimum fair trade price of washed Arabica was adjusted from US $1.25 / lb to US $1.4 / lb, and the minimum fair trade price of sunlit Arabica was raised from US $1.20 / lb to 1.35 / lb.

On top of the above, organic coffee is added by 30 cents per pound to make up for the high cost of organic production.