The Strategist

Why coffee addicts should care about climate change


09/05/2016 - 15:09



Today’s coffee market is estimated at around $ 19 billion. Every day, people in the world drink more than 2.25 billion cups of this beverage. However, it looks like coffee addicts will soon have to limit their appetites.



Results of a recent study "A Brewing Storm" suggests that climate change would lead to a reduction in coffee production by 50% in the next decade. If the situation does not change, the world may see a deficit of this drink and, as a result, higher prices for it.

John Connor, one of the report’s authors, explained that there are several case scenarios of how the climate change would affect the world’s coffee market. "I think this applies to the entire agribusiness complex, however, this area may be particularly affected," - he said.

An increase in temperature would reduce area of coffee plantations, as well as affect quality of coffee and raise price for consumers. According to John Connor, it's not just about the heat. Now, the coffee-growing regions are fighting with new diseases. Some of plantations are suffering because of influx of pests. What is more, high temperature affects physical and psychological condition of workers at coffee plantations.

Even small changes in climate can significantly alter the situation. To date, there are nearly 25 million farmers engaged in the production of coffee, but about 80% of them live in poor countries, such as Guatemala, Ethiopia, Vietnam, Colombia.

The report also noted that coffee producers should pay attention to the problem of global warming now. Otherwise, consumers will have to pay price for their inaction later. Companies such as Starbucks and Lavazza, as well as the International Coffee Organization, have already publicly acknowledged the seriousness of climate risks.

The changes are especially noticeable in Mexico and Central America that produce one-fifth of all the world's Arabica. During the last few years, farmers in these countries have been experiencing all negative consequences of climate change. Global warming and following drought, as well as epidemic of coffee leaf rust caused flameout of many coffee plantations, especially at low altitudes.

Previously, low altitudes (on average up to 1000-1200 meters above sea level) were ideal for cultivation of Arabica. However, increase in temperature and the epidemic have significantly complicated the process of growing coffee at such heights. Farmers are trying to fight for their only source of income, and are planting breeds resistant to external influences. However, growing new trees, protecting crops and waiting are often very unfavorable decisions, given the economic situation and living standards in the Central American countries.

Some coffee planters do not want to take risks, and seek new options to make use of land no longer suitable for coffee. Cocoa cultivation can be a way out. Number of farmers in El Salvador and Nicaragua have already switched to the cocoa production. They explain their choice by the fact that cocoa is much cheaper to produce than coffee, yet bring noticeably more profit. In addition, cocoa’s history of cultivation in Central America is much more longer than that of coffee. In general, cultivation of cocoa requires fewer workers on farms, up to 40% less investment in production. Besides, prices of final product on the world market are more stable. Apparently, this is better than to simply give up on the land, or sell it to urban developers.

source: reuters.com, cnbc.com