Factors That Influence Coffee’s Price:

  • Arabica beans are primarily grown in Central and South America. These are higher quality beans that command a higher price, which has helped Brazil to become the largest coffee exporting nation in the world. At the same time, it has left Brazil exposed to competition from the cheaper coffee bean, Robusta. This Achilles heel has allowed Vietnam to develop a strong coffee industry around the cheaper Robusta bean, putting Vietnam second in the world in coffee exports.

 

  • Four major corporations dominate the Robusta coffee world. Kraft, Nestle, Proctor & Gamble and Sara Lee account for more than 50% of all Robusta coffee bean purchases, preferring Robusta beans to Arabica beans solely because of their price. On average, Robusta beans are 70% cheaper than Arabica beans, allowing for greater mass production uses.

 

  • Fair trade coffee is slowly gaining popularity. Fair trade guarantees coffee growers a set price prior to harvest. This has led to more privately negotiated deals with coffee co-ops around the world. In 2004, it represented 24,222 metric tons, according to the Max Havelaar Foundation, and 33,991 metric tons in 2005.

 

  • Numerous studies have found that drinking coffee might help reduce the risk of diseases such as Alzheimer’s, cirrhosis of the liver, gout and others, significantly outweighing some of coffee’s known health risks. Scientists are still attempting to determine all of the applications that coffee may have, which is good news for the millions of coffee drinkers worldwide.

 

  • Coffee is a key cash crop in various developing countries. Coffee accounts for 60% of Ethiopia’s exports. The current belief is that more than 100 million people in these countries depend on coffee as their primary source of income.