30 October 2018 | listicles and factfiles | Views:

4 things you need to know about cheap coffee

1. It’s traded as a commodity on the stock market

Like gold and oil, cheaper and lower grade coffee sits on the stock market. This means coffee farmers are subject to the whims and wants of traders. Speciality coffee, alternatively, generally exists outside of this - our coffee is sourced directly from the most talented farmers, so they get a good price for their hard work.

2. Prices fluctuate massively, for reasons real and imaginary

You might think it’s not a problem that coffee exists as a list of endlessly changing numbers on a screen. But when you look at what causes those changes, it becomes clear. Anything from droughts and flooding to someone thinking there may be droughts and flooding can cause prices to rise. Whereas a good season, or the assumption that one’s coming, causes the market to completely crash.

3. Farmers lose money - technically paying to sell their crops

The instability of the stock market has lead to the lowest prices in a long time - in August, prices dipped below $1 per pound. And to put that in perspective, expert insight says it costs commodity producers around $1.50 to produce one pound of coffee. With the supply chain taking two thirds of profits and prices at $1, farmers are losing 50 cents with every sale.

4. For most farmers, it’s an almost inescapable situation

So why don’t farmers just grow speciality coffee instead, so they’re guaranteed a good sale each season? Simple - it costs a lot to make the switch from commodity. Requiring training, processing machinery, tools as simple as a thermometer - if you’re losing money with every crop, there’s just no way to escape the cycle.

Breaking the cycle

Growing commodity coffee is a financially unfulfilling, unstable and inescapable way of making a living. We can’t take on the commodity markets themselves, but there is one way we try to help - by breaking the cycle.

Our Three Phase Programme involves finding farms with the potential and will to produce a speciality crop. They grow us a sample and, if it’s got promise, we move on to the second phase. Providing up to £1000 worth of technical investments, farms are guided to grow a small batch of better beans. After that, the third phase involves scaling up with the help of local agronomists and consideration of the land conditions.

Why do we do it? It’s not about charity, it’s about quality. Farmers have the chance to grow better crops and more of them, so we can keep bringing it back to you - we set up a new, smaller supply chain that’s them and us. And more and more people can see farming as a viable, rewarding way of life.


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