TechnoServe Annual Meeting
A production surplus is the cause of record lows in the price of coffee. A long-term decline in price per pound has been recorded through the 1990s and has been labeled as a cyclical downturn, a systematic change in the coffee industry.
Three main factors for this change are:
Arabica is a higher quality coffee bean than robusta, yet coffee roasters are becoming more skilled at removing the bitterness of robusta. The technology is improving and creating a better tasting low quality bean. In Brazil and in Vietnam, high labor efficiency and a low labor cost has dropped the price of coffee.
TechnoServe is working to create a broad scale differentiated labor group, and also advises that farmers produce specialty coffee. Coffee producers at a high altitude have the advantage of being able to grow distinctly different coffee from the low altitude low cost coffee producers.
Specialty coffee is obviously a niche market. A grower can hold his position in the market with specialty coffee while the surplus of 6–30 million bags of lower quality coffee is depleted. Specialty coffee is 6% of the coffee industry; and of that 6% of specialty coffee, approximately 92% is gourmet, 4% is Free Trade and 4% is decaf.
TechnoServe puts forth two plans:
For more information, see The Coffee Quality Institute.