chocolate covered coffee beans

coffee: the nectar of the gods

Monday, September 04, 2006

Economics of coffee

is one of the world's most important primary commodities; it ranks second only to petroleum in terms of dollars traded worldwide, ($70 billion pa). With over 400 billion cups consumed every year, coffee is one of the world's most popular beverages, comprising about a third of tap water consumption. Worldwide, 25 million small producers rely on coffee for a living. For instance, in Brazil alone, where almost a third of all the world's coffee is produced, over 5 million people are employed in the cultivation and harvesting of over 3 billion coffee plants; it is a much more labour-intensive culture than alternative cultures of the same regions as soy, sugar cane, wheat or cattle, as it is not subject to automation and requires constant attention.

Coffee is also bought and sold as a commodity on the New York Board of Trade. This is where coffee futures contracts are traded, which are a financial asset involving a standardized contract for the future sale or purchase of a unit of coffee at an agreed price. The world's largest transfer point for coffee is the port of Hamburg, Germany.