For some time it’s been believed by many that coffee is “the second-most traded commodity after oil.” This coffee drinker recently decided to look into that “fact.”
Kudos to Politifact, a nonprofit project operated by the Poynter Institute for Media Studies in St. Petersburg, Florida, which has clarified the details concerning coffee’s extraordinary popularity as a beverage for hundreds of millions of consumers. Politifact investigated a claim by Starbucks’ director of public policy who, while testifying at a Congressional hearing in 2017, noted that “Coffee is the second-most traded commodity after oil, and 25 million farmers around the world rely on income generated from growing coffee.”
In an article on Politifact’s website, No, coffee is not the second-most traded commodity after oil, reporter and fact-checker Jon Greenberg carefully analyzed coffee’s standing in the export market and this startling claim, long believed and repeated by this coffee drinker who gets his wheels going with a morning mug of coffee.
Greenberg notes that the United Nations trade statistics branch estimated (in 2015) the export market for oil at $788 billion, aluminum at $106 billion, copper at $104 billion, and iron ore and concentrates at $67 billion. With help from senior economist John Baffes at the World Bank’s Development Prospects Group, Greenberg estimated the size of coffee export market at about $19 billion (based upon the amount of coffee sold from the International Coffee Organization and the average price per kilogram from the World Bank).
Greenberg notes further that two other agricultural products beat out coffee: the world market for soybeans was $57 billion and for wheat was $29 billion in 2015. Of course, some huge fraction of commodity soybeans are used as livestock feed and not for human consumption.
Yet, truth be told, back in 1970, Greenberg, quoting senior economist John Baffes, points out coffee was second to oil, but later grains and metals overtook coffee and in 2000, coffee ranked 15th, bested by, among others, hardwood logs, bananas and gold.
Greenberg also notes that in the world of modern finance, which includes the trading of coffee contracts by investors, the number of coffee contracts traded and the value of such contracts are much lower than for many other commodities.
Nonetheless, as noted by Fairtrade International, an estimated 1.6 billion cups of coffee are brewed every single day. And worldwide, over 125 million people depend on coffee for their livelihoods. This nonprofit association focuses on ensuring that all farmers earn a living income and agricultural workers earn a living wage. Coffee is one of more that 300 commodities that Fairtrade International oversees with this laudatory goal in mind.
An article on Wikipedia on the Economics of Coffee notes an even large number of cups consumed each day: over 2.25 billion cups of coffee consumed each day. And although coffee may not be the second-most traded commodity after oil, it was the top agricultural export for 12 countries in 2004, and 25 million small producers rely on coffee for a living worldwide.
Consequently, it is very good news that this year’s Terra Madre Salone Del Gusto (organized by Slow Food, the Italian Region of Piedmont and the city of Turin) has launched a new initiative this spring: the Slow Food Coffee Coalition, intended to unite all the participants in the coffee supply chain, from growers to roaster to distributors to consumers. In the words of Alessia Pautasso, Slow Food Italia’s Communication and Media Manager, this coalition unites participants by their love for the beverage and a desire for good, clean and fair coffee for all.
And check out our coffee directory which now has listings of nearly 100 community-based coffee roasters in the USA and Canada who are committed to building and supporting fair and sustainable trade relationships for the benefit of farmers and their exporting cooperatives, families, and communities.
(Frank W. Barrie, 5/2/21)