Daily Coffee News: A Brief History of Coffee Production

Coffee in Cabo San Lucas, Mexico

Daily Coffee News has published a great article about the history of global coffee production. It discusses the fragile nature of coffee, and how it’s supply to billions of people worldwide has evolved over the years:

Most immediately, concerns surrounding climate change, organic pests, consumer behavior, and any number of volatile market factors come to mind. But these are not only the supply problems of the future. They have been repeated over decades and generations, reflecting the cyclical nature of production and consumption in an always complex and evolving global market.

 

Perhaps no organization has more perspective on the modern history coffee supply than the International Coffee Organization, the 51-year-old body originally established in collaboration with the United Nations that to this day oversees the International Coffee Agreement, representing all the world’s coffee producing countries and nearly all the world’s consuming countries.

Earlier this year, the group published a monumental report on the market history of coffee, one that provides an arguably frightening view of the past and future coffee supply. We plan to extract some key points from that report in a multi-part series, beginning here with here with a brief history of coffee production over the past 50 years. The period is easily divided in two: The regulated period under the International Coffee Agreements from 1963 to 1989; and the subsequent free market period since 1990, following the collapse ICA negotiations in 1989. The ICO explains:

Up until 1989, the coffee market was regulated by a series of International Coffee Agreements which were intended to manage supply and maintain price stability. This system subsequently collapsed, and since 1990 the coffee market has been subject to the free market forces of supply and demand.

This breakdown was disastrous for many people along the supply chain, as the ICO’s composite indicator price for coffees dropped by nearly 75 percent in the subsequent five years, from $1.34 USD per pound in 1989 to an average of $0.77 per pound through 1995. That said, the deregulation also lead to immediate increases in supply opportunity, laying the foundation for the free global market we are familiar with today.

The entire article can be found here:  A Brief History of Global Coffee Production As We Know It (1963-2013) It provides a great breakdown of coffee production, country by country.

Here’s what it has to say about Mexico and Central America:

Total production has increased in Central America and Mexico to an average of 18 million bags in the free market period, up from 13.8 million in the controlled period, although the region’s share of the world’s market has decreased, from 18.1 percent to 15.9 percent. As we’ve covered extensively on this site, output in Central America and Mexico has been substantially affected by leaf rust disease (la roya) in the past two years. As a result, many of the countries in Central America had an output similar to that in 1990, resulting not in negative growth but in a smaller share of the global market.

You can read the entire article here.

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