Economic supply essay
Economics Essay – Supply
Introduction
Coffee beans are mainly used for the production of coffee. As coffee is one of the world's most widely consumed beverages, coffee beans are a major cash crop and are an important export of many developing countries. Most of the world’s coffee beans are produced by small suppliers in third world developing countries, whose livelihood depends on their production of coffee beans. Many factors can affect the supply of coffee beans:
Expansion of the Coffee Industry The expansion of the coffee industry has brought both positive and negative effects on the supply for coffee beans. On the one hand, the increase in the distribution of coffee products (such as instant coffee in supermarkets and the growing variations of coffee) has increased demand for coffee beans; making coffee beans more valuable and so increasing the price of them. This has caused an extension in supply for coffee beans. On the other hand, this increase in the price of coffee beans has attracted more suppliers to enter the coffee bean market and which has increased competitiveness in the coffee industry as a whole. This increase in the number of coffee bean producers has increased supply for coffee beans and so producers must try to reduce their prices in order to compete with rival producers. Coffee companies, such as Nescafe™, have begun to exploit producers of coffee beans in order to lower their costs and so stay competitive with other coffee companies. Most of the world’s coffee beans are produced in third world developing countries and so the exploitation by these big coffee companies has left many producers in these third world countries unable to make enough money, off of producing coffee beans, to support their families. This has led to many of these producers closing down and so the supply for coffee beans in these countries decreasing in past years.
Fair Trade One way in which producers have tried to tackle this exploitation by
Introduction
Coffee beans are mainly used for the production of coffee. As coffee is one of the world's most widely consumed beverages, coffee beans are a major cash crop and are an important export of many developing countries. Most of the world’s coffee beans are produced by small suppliers in third world developing countries, whose livelihood depends on their production of coffee beans. Many factors can affect the supply of coffee beans:
Expansion of the Coffee Industry The expansion of the coffee industry has brought both positive and negative effects on the supply for coffee beans. On the one hand, the increase in the distribution of coffee products (such as instant coffee in supermarkets and the growing variations of coffee) has increased demand for coffee beans; making coffee beans more valuable and so increasing the price of them. This has caused an extension in supply for coffee beans. On the other hand, this increase in the price of coffee beans has attracted more suppliers to enter the coffee bean market and which has increased competitiveness in the coffee industry as a whole. This increase in the number of coffee bean producers has increased supply for coffee beans and so producers must try to reduce their prices in order to compete with rival producers. Coffee companies, such as Nescafe™, have begun to exploit producers of coffee beans in order to lower their costs and so stay competitive with other coffee companies. Most of the world’s coffee beans are produced in third world developing countries and so the exploitation by these big coffee companies has left many producers in these third world countries unable to make enough money, off of producing coffee beans, to support their families. This has led to many of these producers closing down and so the supply for coffee beans in these countries decreasing in past years.
Fair Trade One way in which producers have tried to tackle this exploitation by