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Forum to Address Coffee Trade Challenges Convenes

London, England – Staff from the Office of the U.S. Trade Representative (USTR) led a U.S. delegation to London today to join other members of the International Coffee Organization (ICO) in convening the first-ever Consultative Forum on Coffee Sector Finance. Today’s meeting marks a key milestone in the United States’ ongoing efforts to help reduce challenges affecting the American coffee industry, which employs American coffee retailers and roasters.

The Consultative Forum on Coffee Sector Finance was specifically designed to address challenges faced by small- and medium-sized farmers and traders in their efforts to manage risk and access credit specifically related to coffee trade. It primarily focuses on risk-management tools for green coffee price volatility and how they can be improved to better serve the needs of small- and medium-sized producers. Approximately 25 million coffee farmers, largely small- and medium-sized growers, depend on coffee for their livelihood. The United States imported nearly $7 billion worth of coffee in the last 12 months, supporting a $38 billion industry in the United States and hundreds of thousands of American workers.

“The creation of this Forum is a significant milestone for the United States and is now enhancing our ability to work closely with our trading partners, the private sector and non-governmental organizations to address issues affecting coffee production, trade, and consumption,” said United States Trade Representative Ron Kirk. “The progress made through this Forum will help maintain a stable supply of high quality coffee needed to ensure a vibrant U.S. coffee industry and support hundreds of thousands of Americans who earn their livelihood in this industry."

Green coffee prices can fluctuate dramatically, making it difficult for growers and traders to plan accordingly. Although market-based tools such as hedging instruments are available to mitigate this risk, there are often significant barriers – such as the lack of knowledge, regulatory and institutional obstacles and financing – that make these tools largely inaccessible to small- and medium-sized coffee growers. In light of these barriers, today’s meeting explored a range of potential risk management tools for small- and medium-sized growers. Among them were direct and longer-term contracts between coffee producers and roasters, the use of producer cooperatives and associations as a way to pool risk, and making market-based tools such as hedging instruments more accessible to small- and medium-sized producers.

The Forum meeting consisted of staff from USTR, the U.S. Departments of State and Agriculture, as well as representatives from the U.S. coffee industry and representatives from over 38 countries and the European Union. Participants included leading experts in coffee trade, economics and development as well as representatives of the world’s leading coffee producing and consuming countries, including Brazil, Colombia, Vietnam and European Union Member States.

For more information on the Forum and the ICO, visit www.ico.org.