Coffee speculators suck

Sorting and pulping coffee beans at a fair tra...

Image via Wikipedia

The folks at Kickapoo Coffee posted this story on their Facebook page a few weeks ago (and I shared it with my friends there). As reported in the article by the L.A. Times, coffee prices are rising in part because of financial speculation.

To get in on the premium price that fair-trade, organic coffees can bring to growers, many joined cooperatives that negotiated contracts and built direct relationships with fair-trade roasters. However, one consequence of the recently escalating prices is that now some coffee growers can earn more for their beans in the short-term if they back out of their co-op. As a result, some co-ops are reportedly struggling. The demise of these co-ops would mean that once again these growers would be at the mercy of the big companies and their middlemen (“coyotes”).

I’m no expert, but I kinda think speculation in any market does little for the collective good.

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One comment

  1. vanessa

    With you. Speculators are all about creating quick wealth based on expectations, fears, desires. Problem is, this has real repercussions for people on the ground. Sucks that coops are suffering and that there’s a disincentive to band together.

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