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Case
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Reference no. IB53
Published by: Stanford Business School
Originally published in: 2004
Version: 19 February 2004
Length: 24 pages
Data source: Field research
Notes: This item is part of a free case collection. For terms & conditions go to www.thecasecentre.org/freecaseterms

Abstract

In 2003, the 25 million international coffee growers faced a crisis. Prices for coffee beans were the lowest they had been (in real terms) in 100 years. The coffee growing business had historically been one of boom-and-bust. Several countries had to dominate the market and raise prices, only to attract new entrants that increased total production, resulting in oversupply and price collapse. An international co-operative agreement had been attempted in order to stabilize prices, but that effort failed. At the same time as growers were struggling to survive, a small number of roasters dominated the world market. Specialty coffee companies were also thriving. The case examines coffee supply and demand. It discusses efforts by governments, non-governmental organizations (NGOs) and roasters to help farmers earn enough money to support themselves and sustain their farms. It asks what changes in the market, or actions by governments, can help to correct the existing market problems. This case is part of the Stanford Graduate School of Business free case collection (visit www.thecasecentre.org/stanfordfreecases for more information on the collection).
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Abstract

In 2003, the 25 million international coffee growers faced a crisis. Prices for coffee beans were the lowest they had been (in real terms) in 100 years. The coffee growing business had historically been one of boom-and-bust. Several countries had to dominate the market and raise prices, only to attract new entrants that increased total production, resulting in oversupply and price collapse. An international co-operative agreement had been attempted in order to stabilize prices, but that effort failed. At the same time as growers were struggling to survive, a small number of roasters dominated the world market. Specialty coffee companies were also thriving. The case examines coffee supply and demand. It discusses efforts by governments, non-governmental organizations (NGOs) and roasters to help farmers earn enough money to support themselves and sustain their farms. It asks what changes in the market, or actions by governments, can help to correct the existing market problems. This case is part of the Stanford Graduate School of Business free case collection (visit www.thecasecentre.org/stanfordfreecases for more information on the collection).

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