Sunday, March 16, 2008

Prices on Green Coffee

Since more than a month now the market prices on bulk-coffee has been above the Fair Trade price! (check these links:

We are supporting the basic idea behind Fair Trade - to give the farmer a "minimum wage" - but these facts does also show some of the rigidity such a large system has!

What will be the consequences of the higher market price versus FT-price? It might just be a temporary situation caused by market speculation. But questions pops up like will the FairTrade farmers sell at better prices to the ordinary market and thereby creating FT-supply deficiencies? Will the big roasters be forced to pay prices better than FT for all their coffee and not just for a symbolic amount of Fair Trade Coffee for marketing (in the long run I doubt it considering the underlying power relations)?

Our Direct Trade prices are based on quality and are therefore all above both the Fair Trade price and the currently high bulk-market prices.


Brad said...

it will be a very interesting time for you to visit panama and Guatemala seeing first hand how this is effecting coffee estates that have fair trade vs the ones that don't. look forward to hearing about your trip.

The Coffee Collective said...

Yes we look very much forward to what Klaus brings back from his visit there! For sure he will post about it here!


Cameron said...

hi there

the way the Fairtrade system works - producer organisations get the Fairtrade minimum price for coffee OR the market price, whichever is higher PLUS the Fairtrade Premium.


and also:

The Coffee Collective said...

Cameron, we are really glad you bring this information on! Its good to know that the Fair Trade system has this kind of flexibility!

We will make a post with you links later.