While the quality of Australia’s coffee has skyrocketed in the past 20 years, what we pay for it hasn’t. Our $4 lattes are leaving producers struggling – and prices may have to soar. I wrote a feature article on the coffee industry for Good Weekend magazine’s Food Issue, and spoke about the story on Nine’s Today show.
There’s an inequity at the heart of the coffee industry: it’s grown in poor countries and consumed in rich ones.
The biggest producers are Brazil, Vietnam, Colombia and Indonesia, while the biggest importers are the US, Germany, France and Italy, in an industry that moves about 10 billion kilograms of coffee per year. (Australia is a minnow at number 15, taking 1.7 per cent of annual global shipments.) The four key multinational buyers are Nestlé, Kraft Heinz, The J.M. Smucker Company and Starbucks Corporation.
At the mercy of this corporate might are the world’s coffee farmers, about 25 million of them, mostly smallholders with a hectare or two of trees.
The majority – whether they’re an Ethiopian auntie with two bushes in the yard, a Nicaraguan tenant farmer with a 12-kilogram basket strapped to his waist, or a Vietnamese villager winnowing beans by hand – are beholden to a coffee price determined on international commodity markets and mostly traded in futures contracts.
Climate change is affecting coffee
According to a prediction by global collective World Coffee Research, demand for coffee will double by 2050, pushed by Millennials in the US and soaring demand in China, where rapidly expanding local chain Luckin is facing off against Starbucks to convert one billion tea drinkers. In the same period, climate change means the amount of land suitable for production will halve. Coffee plants are extremely sensitive to climatic shifts and irregularities, requiring predictable patterns of rain and dry to set fruit and help it grow and mature. Rain at the wrong time, or unexpected heat, can create ideal conditions for pests like the dreaded leaf rust which can turn a plantation into a field of dead sticks. A leaf rust epidemic in Central America in 2012 caused 1.7 million people to lose their jobs, and devastating outbreaks persist.