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Why coffee prices are low despite steady demand

Despite a steady increase in coffee consumption around the world, trade prices have fallen dramatically in the past three years, hitting producers.

At the same time, the cost of an espresso or latte remains as full-fat as ever. What’s going on?

Futures on arabica and robusta, the most widespread varieties of coffee, have fallen 40 percent since the beginning of 2017 and are now at historically low levels.

This is largely because of bumper harvests in Brazil, the world’s main coffee producer.

But at the same time, consumption has grown by an average of 2.1 percent a year for the past decade, according to the International Coffee Organization (ICO).

Two billion cups of coffee are drunk every day, according to Fairtrade International, which works to improve the lot of farmers through better pricing and conditions.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark East Africa.

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