Why is green coffee still traded between producing countries?

José Dauster Sette – Executive Director of the International Coffee Organization (ICO) said that from 2015 to 2018, the world exported an average of about 121 million 60kg bags per year. This quantity includes green, roasted and instant Arabica and Robusta coffees. Of which, about 8.5 million bags are traded between producing countries, accounting for about 7% of total export turnover. It is estimated that about 74% of total coffee exports from Vietnam, Brazil and Indonesia went to other producing countries during this period. Coffee producing country Honduras also exported 460,000 bags of coffee to other producing countries such as Mexico, Peru, India and Colombia.

According to Jose, green coffee trade between producing countries mainly focuses on instant coffee for processing reasons and Robusta coffee for price and quality reasons. When dividing coffee trade between producing countries into different segments, the ratio is quite different from overall trade. In total, instant coffee accounts for 21% of exports, compared to 8% of global exports.u.

Joao Mattos – Latin American Coffee Production and Market Coordinator at CLAC Comercio Justo said that there are two reasons why producing countries have to import coffee. First, rotating imports and exports between producing countries helps meet domestic demand and provide supply for the instant coffee industry. Second, input coffee prices are often much cheaper due to lower quality.

José – CEO of ICO also shares the same opinion as Joao Mattos. He also said that the price of imported coffee is often cheap because it is difficult to trace its origin. Therefore, it is unclear how much of it is used for instant coffee and how much is used to produce blended coffee. Furthermore, countries import Robusta coffee because it is ideal for making instant coffee. A bag of Robusta coffee produces more instant coffee than a bag of Arabica coffee.

In real life, Mexico is the ninth largest coffee producer in the world. According to ICO data, its production figures have been around 4 million bags since 2017. However, from 2015 to 2018, the country’s average annual green coffee imports were the highest. three for producing countries, reaching 715,000 bags. These coffee beans come mainly from Brazil, Vietnam and Honduras. Mexico does not just import to satisfy the domestic market. Some imports are actually used for processing and re-exported as instant coffee, primarily to Central America.

Some people oppose transactions between producing countries. Because they think it strengthens trade relations, increases cash flow to trading countries while adding value to lower quality coffee. Many people are also concerned that this could reduce the value of coffee in the domestic market.

However, many people believe that this exchange of goods can motivate coffee producing countries to improve quality to get higher prices and be more popular. Most producing countries have very small purchasing power and cannot maintain a large market for high-quality coffee, José said. Over time, increased exports accompanied by marketing programs for high-quality coffee increased consumption, leading to periods of differentiation with the emergence of specialty coffee.

Trading green coffee beans between producing countries is a way for farmers in producing countries to access potential markets and get better coffee prices. This also helps meet the demand for instant coffee and domestic and foreign consumption. At the same time, cooperative transactions can also promote domestic consumers’ demand for high-quality coffee, contributing to maintaining and developing a healthy economy. However, the problem is how producing countries can increase consumer demand for high-quality coffee, thereby encouraging farmers to improve quality. This is the story of the entire industry and requires investment and promotion efforts from stakeholders about coffee quality and connecting relationships between producers and consumers.

As a business pursuing a sustainable coffee journey, XLIII Coffee always strives to bring quality specialty coffee beans that are not only delicious but also contain the unique values of original coffee. The production and supply process of products is always publicized, introducing customers in detail with the most truthful information about varieties, growing areas, manufacturers, and transportation routes to bring consumers closer. with supply chain facts. From there, when receiving a cup of coffee, everyone can fully understand the values behind that coffee farmers and workers convey. If you want to experience the poetic journey of the notes and truths of specialty coffee, visit XLIII Coffee!

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