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  • Economics of Growing Coffee

    With regards to agriculture, coffee is one of the most important export products for many developing countries.

    Coffee Economics

    This section aims to give an overview of coffee economics in some of the coffee growing countries, and includes information on both the micro and macro economics of the coffee trade in countries such as Columbia and Brazil in South America and Kenya in Africa.

    Topics covered include the economics of production, processing and marketing in the coffee sector.

    Coffee as an Export Crop

    Coffee is an export crop in nearly all of the countries that produce it, there are a few exceptions, these tend to be countries that have relatively small production such as malaysia, Panama and the Philippines; or cuba, which suffers from a trade embargo with the USA; these countries typically export less than 50% of their overall coffee production. The coffee marketing system in the larger coffee producing countries can be broke down into major components, collection, assembling and processing followed by exporting to their trading partners.

    Stages in Marketing Systems in Coffee Producing Countries

    This section gives an overview of the marketing systems that are involved in coffee development and the coffee economy and the agencies involved at each step.

    The initial stage is coffee production and this involves farmers from smallholder's through to large farms and estates. The next stage for the smallholder's and medium sized coffee farms is collection and will involve cooperatives and traders. Initial processing is then carried out by manufactures. Curing is then taken care of by cooperatives or state and private manufactures.

    Coffee Auctions

    Intermediation then occurs through the use of coffee auctions and brokers. Shipping of coffee products is then taken care of by exporters. Roasting then typically occurs in the country that is to consume the product. This is followed by distribution by wholesalers and retailers. Then the final piece of the coffee economics jigsaw involves the consumption of the coffee by the paying customer.