Since coffee is by far the most popular drinks of our times, without any known rival so far, it goes without saying that the coffee market itself is a very competitive sector. With the huge number of coffee brands, companies have to come up not with just good prices, but with quality guarantees to prove that their coffee is well-flavored and tasty. Statistics show that there is only one commerce domain more active than coffee market and it is that of oil; consequently one can hardly imagine the extent of the transactions and the number of figures for the profits that result from the coffee market.
From time to time, crisis periods appear on the coffee market, related to poor bean quality, the creation of stocks or oversupplies, not to mention the very low coffee prices. All these elements threaten to affect the lives of those who depend on coffee cultivation for a living, the coffee farmers or producers. Furthermore, pollution has a heavy word to say in the evolution of the coffee-growing areas where entire ecosystems could be endangered; while the coffee consumer is actually unaware of the strive that is going on behind the morning coffee he or she prepares.
In global economy, the coffee market is among the fewest domains where small producers dominate trade commodities; statistics show that more than 75% of the world's coffee production comes from little farms that are entirely independent in terms of harvesting and supplying. Every time, coffee prices drop, there are farmers who come to abandon their coffee fields, moving to different sectors of activity. Such changes on the coffee market leads to instability within many communities as well as to shifts in the evolution of national economies since a part of the investments in the sector are lost.
Though the demand on the coffee market usually remains stable, there are times when fluctuations occur here as well. However, even during the times when the coffee prices drop, there is no relevant price reduction for the coffee products on the market due to the same little fluctuation in the demand. If people need just as much coffee as before, why would anyone try to make it cheaper: businesses profit from this constancy in the field and have profit changes unaffected by such fluctuations. Such transactions profitable only for some parts of the trading process are not suspected by the small farmers who have no idea about the coffee price in London or Sydney.
Muna wa Wanjiru
Original source: http://www.articlesbase.com/coffee-articles/why-the-coffee-market-itself-is-a-very-competitive-sector-310026.html
