DR. MARIO ARTURO RUIZ ESTRADA
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REVISTA ACADÉMICA ECO (23) : 73-92, JULIO-DICIEMBRE DE 2020
2. An introduction to Coffeeconomics
“Coffeeconomics” can be defined as
a new field of economic research in charge of evaluating all issues related
to coffee market structures by means of exhaustive investigation of the
behaviour of producers, brokers, sellers and consumers of coffee, both in the
short and the long term. Coffeeconomics is supported by the use of different
quantitative and qualitative research tools in order to evaluate analytically
the truthfulness and reliability of different coffee markets around the world,
anywhere and anytime.
As an integral part of this definition, “Coffee Market Structure” is defined as the
dynamic interaction among producers, brokers, sellers, and consumers, the four
large players in the coffee trading process, all of whom pursue a diversity of benefits
or gains, from profits to maximum consumer satisfaction. Under the Omnia Mobilis
Assumption (Ruiz Estrada, 2011), it is assumed that the coffee market structure will
always have failures and will continuously be in a dynamic imbalance state (DIS)
(Ruiz Estrada, 2013).
The main objective of Coffeeconomics is to generate specific economic research in
order to evaluate qualitatively and quantitatively the coffee market structure and all
its different players from an economic point of view, something that hardly existed in
the past. The study of coffee market structures involves a series of difficulties, such as
(i) limited information from producers; (ii) high speculation, especially from brokers
and sellers; (iii) income inequality and coffee consumer preferences.
The fast expansion of worldwide coffee consumption makes the study of
Coffeeconomics essential. According to statistics from the World Trade
Organization (WTO, 2019), the consumption from 1999 to 2019 increased 21 %
(after China had access to the WTO). In fact, coffee has opened new opportunities
for producers and consumers to obtain large benefits in the short and long run.
The main problem in Coffeeconomics is access to the coffee market prices
database and documents, something that has become more complex nowadays.
A lot of information about coffee is limited. Additionally, high speculation and
unknown distribution channels make it impossible to obtain trading routes
and prices (price negotiations between producers and brokers). Speculation
of coffee prices generates inconsistency when attempting to do trustworthy
economic research that evaluates coffee market structure problems. Possible
future changes in the collection of coffee costs and in access to databases and
price documents are expected. These possible future changes face three key