Posted Sun Mar 28, 2004, 11:15am Subject: World Coffee Production (AKA too much time on my hands)
( I have read frequently that coffee is the world’s second most traded commodity, (After oil). I have thought about this for quite a while, and the numbers just don’t jive. Here is my math (please correct as you see fit, all numbers approximate):
Annual coffee production (2002) 115,800,000 60 kilo bags (http://www.nybot.com/minicoffee/qcoffee.pdf) =6.95 billion kilos @ 2.2 lbs/kilo = 15.3 billion lbs That included robusta, but let’s be generous and say $0.50/lb = $7.65 billion
Daily oil production ~ 72 million bbl (Click Here (www.worldoil.com) I am a bit conservative) 1 bbl/day production ~ 55 tons (US)/yr =72,000,000*55*2000 ~7.9 trillion lbs =72,000,000*365 ~26 billion bbl/yr @ $35/bbl (we in Texas thank you for this, by the way) ~$920 billion
So on one hand, we have 7.9 trillion lbs of oil vs 11 billion lbs of coffee
Or
$920 billion of oil vs $5.5 billion of coffee
My point is that there is too much distance between these numbers for coffee to be #2 (I think that copper production is worth about $18 billion, for example: Click Here (mmsd1.mms.nrcan.gc.ca))
I think that this is a meme that is left over from the 1930s or something (I think it is mentioned in Uker’s) that just keeps getting repeated.
Posted Mon Mar 29, 2004, 7:16pm Subject: Re: World Coffee Production (AKA too much time on my hands)
Based on the Oxfam report (Mugged, Poverty In Your Coffee Cup) total coffee sales was around 8 billion USD for the year referenced in the article. The big 4 transnationals accounted for ~1/2 of the 8 billion $$. Not even close to copper. Not sure why people comment on coffee being the second largest commodity traded world wide. Maybe better stated is that coffee is or was the major or significant source of income for a large number of countries.
Noel Mano dell 'operatore> Macinadosatore> Miscela> Macchina espresso
Mr_Bingley Senior Member Joined: 26 Feb 2004 Posts: 184 Location: New York Expertise: Professional
Posted Wed Mar 31, 2004, 4:41am Subject: Re: World Coffee Production (AKA too much time on my hands)
yeah, the numbers have never seemed to add up total value wise. perhaps the angle that they are looking at is that that something on the order of 100 million people derive part/all of their income from coffee?
coffeenote Senior Member Joined: 2 Apr 2004 Posts: 1 Location: Connecticut Expertise: I live coffee
Posted Fri Apr 2, 2004, 10:43am Subject: Re: World Coffee Production (AKA too much time on my hands)
It is a very old number, and I think was old when I first heard it in about 1990. It refers to the international trade component (so corn production in US in 2003 of $23 Billion need not apply as most is no doubt consumed here in US). Back in the 80's, when coffee quotas were in effect, world prices were always north of $1/lb so that inflates the number as well. By the way, coffee consumed in the country it was grown does not count either, just exports.
Given all of the protectionism in the agricultural markets, and the occasional price spikes in coffee (most recently 1997) I wouldn't be totally shocked if in some years coffee might have been "the second highest internationally traded commodity" in the world.
I wonder if java programming is now counted as an "internationally traded commodity?"
flydhest Senior Member Joined: 28 Jul 2003 Posts: 274 Location: Washington, DC Expertise: I live coffee
Espresso: ECM Giotto Grinder: Mazzer Mini Roaster: Hottop
Posted Fri Apr 2, 2004, 11:11am Subject: Re: World Coffee Production (AKA too much time on my hands)
Assuming your numbers are correct, one possible explanation for the discrepancy could be the amount of trade that goes on is dramatically different than production. Many commodities get bought and sold by speculators, and thus the same notional bag of coffee could be bought and sold several times. I don't know anything about those particular markets, but it's possible that coffee is much more widely re-traded whereas copper, for example, has more of its production sold directly to end users and less through brokers. Essentially, you could get the result through a form of double counting. It might not be what you might infer when you read the statistic, and yet it could be true nevertheless. Of course it wouldn't make you feel any greater confidence in the origianl citation of coffee being such a heavily traded commodity.
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