Coffee has been traded for commercial purposes for 400 years. From there, it has spread to approximately 70 countries where it is currently grown. The Dutch were the ones who began to establish economies of scale around the production and export of coffee. Later they grew coffee in Java and Ceylon (now Sri Lanka). The first exports from Java to the Netherlands occurred in 1711, and the Dutch East India Company was the first multinational corporation in history and the first to export coffee on a large scale.
During these four centuries, a pattern of neo-feudal behaviour has been generated, which has forced small coffee growers to chain themselves into ultra-dependent relationships with large landowners or multinationals, which have caused multimillion-dollar profits for large companies, in addition to the concentration of land, marginalization and slavery. This is how this business model has been perpetuated until today.
Coffee has reached record prices since 2014 this week. But how does this price increase affect coffee farmers and roasters?
What is the "C" price of coffee?
The coffee commodities market, also known as the "C" Market, is where brokers at the New York Stock Exchange determine the future price of coffee contracts globally every day. By buying or selling these futures contracts, brokers place bets on the expected future value of a certain commodity. Therefore, projections about the future supply and demand of coffee will make possible multiple variations in its price in the present.
Cupping coffees without having any origin info, would be nonsense, right? We can't understand a coffee if we do not know its origin and to really know an origin, we must first try to understand its culture, read its history, listen to its music and observe the state of its political system. There's no other way.
It is the same with many other situations in life, everything is a consequence of something anterior, a reaction of a previous action. This "Newtonian" plot is everywhere, and no matter how hard we try to untangle it, hits our unsophisticated sense of perception like an apple falling on one’s head, preventing us from understanding its full scope and impact.
“In the middle of difficulty lies opportunity" - Albert Einstein
In August of the year 2018, the price of coffee reached levels considered alarming by the majority of those who work in the coffee industry. For the first time in 12 years, the "C" price in New York fell below 100cts/lb. While it is true, the average price of the last 12 years is not much higher than 120cts/lb, this decline generated unprecedented reactions in the specialty coffee world, which we think is positive.
Since time immemorial, people have always travelled and the world has always traded their products. But it is also true that global temperature never rose so fast as in the last 35 years.
If climate change will be held in a temperature increase of 2ºC or less (Aim of the Paris Agreement 2015); By 2050 it is estimated that 40% of all Carbon Dioxide (CO2) emissions will be caused by ships and airplanes only, if not properly regulated.
Indonesia was the third country in the world to grow coffee for commercial purposes after Ethiopia and Yemen.
The history of coffee in Indonesia, as in many others producing countries around the world, begins with tales of colonialism, slavery, monopoly and multinational corporations (Yes! The first ones of modern history were set in the early 17th century).