DR. MARIO ARTURO RUIZ ESTRADA
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REVISTA ACADÉMICA ECO (23) : 73-92, JULIO-DICIEMBRE DE 2020
Salvador, Ecuador, Venezuela, Dominic Republican, Haiti, Cuba, Panama, Bolivia,
Puerto Rico, Paraguay, and Trinidad and Tobago) is responsible for 59 % of the
world’s production, followed by Asia (Vietnam, Indonesia, India, Laos, Thailand,
Philippines, Timor Leste) with 25 %; Africa (Ethiopia, Uganda, Ivory Coast, Kenya,
Tanzania, Cameroon, Madagascar, Gabon, Democratic Republic of Congo, Rwanda,
Burundi, Togo, Nigeria, Ghana, Sierra Leone, Angola, Zimbabwe, Liberia) with
15 %; and finally Oceania (Australia and New Zealand) with only 1 %. In fact, the
top ten players of coffee production worldwide follow this order: Brazil, Vietnam,
Colombia, Indonesia, Ethiopia, Honduras, India, Uganda, Mexico, and Guatemala.
The two general types of coffee beans are known as Robusta, with a strong or
harsher taste, and Arabica, with a sweeter and softer taste. According to different
statistical sources from the International Coffee Organization (ICO), 60 % of
the coffee produced worldwide is Arabica, while 40 % is Robusta. On the other
hand, the genus Coffea is divided into three large groups: Arabica, Dewevrei, and
Stenophylla (Seudieu, 2008). When studying the special conditions needed in the
production of coffee, this paper established that (i) the location of major producers
of coffee is in the equatorial belt; (ii) coffee is very vulnerable to climate change,
weather and natural disasters; (iii) the optimum temperature for coffee production
is between 64ºF and 72ºF.
All these factors make it possible to establish the high vulnerability of coffee
producers. This study determined that in a good harvest the profit that producers
can obtain from coffee brokers is between 15 % and 20 %. Some recent statistics
from ICO show that many producers suffer large losses and bankruptcy. These
losses are due to sudden climate change, unpredicted weather changes, and
disease (fungal, parasitic, viral). At the same time, if these losses suffered by coffee
producers lead to a reduced coffee supply, then the margin of profit for coffee
brokers is also less than the profit margin originally predicted.
Within the structure of coffee production, producers can be classified as large
producers, cooperatives, and small producers. According to recent statistics from
ICO, coffee producers share the following percentages of participation in the
global production of coffee: large producers, 55 %; cooperatives, 31 %; and small
producers, 14 % of the total worldwide production. Therefore, the margins of profit
are directly related to the size of the producer. Large producers are getting bigger
margins of profit and small producers are obtaining smaller margins.
The second main player in the coffee market structure is the coffee broker, who
plays a crucial role in the worldwide price of coffee. According to the findings of this
study, the price of coffee always rises considerably in the stage of commercialization
involving the producer and broker. The possibility and risk of constant speculation
is always there because brokers usually push to obtain lower prices from the
producers and higher prices from the sellers. The main role of brokers is to link