The news went viral last year, when news of droughts hitting Brazil and other South American countries – the world’s foremost suppliers of coffee – sparked fears of a global coffee shortage. Brazil’s coffee industry undoubtedly took a hit starting in 2014, leading to lower quality goods and higher prices.
As climate change wreaks havoc on plantations worldwide, we remain on tenterhooks about the future of the coffee industry. The International Business Times reported just earlier this month that we may be looking at a “chronic long-term shortage of supply.”
However, not everybody agrees that undersupply is imminent. Daniel Bier of the Foundation for Economic Education says the numbers just don’t add up.
Supply shrank, demand grew, and we didn’t have a shortage — thanks to the miracle of the price system, coordinating the behavior of millions of coffee growers, investors, wholesalers, retailers, entrepreneurs, and drinkers around the globe.
In fact, coffee is more abundant than ever. World coffee production has roughly doubled since 1961.
(Read the rest of the writeup here)
So if you ask me, the jury is still out on whether or not there is actually a “shortage.”
There’s no question that climate change is affecting food production all over the world, however. El Nino is a problem faced by agricultural areas worldwide, even here in the Philippines. However, there don’t seem to be reports as of yet about coffee plantations taking major losses. Many plantations are located in the cooler northern regions of the country, and for the most part it’s plantations in the south that have borne the worst of this weather phenomenon.
This makes me wonder: could the Philippines use the fears of a “coffee shortage” to its advantage, and bring more of its coffee to the world? I know it’s not the nicest thing to say one should cash in on widespread panic, but maybe it’s a good time to position ourselves to the global market as an alternative source.
(Somewhat related: there are fears of a chocolate shortage all over the world. Due to a generally warmer climate in the region, Central American farmers are finding it difficult to keep planting coffee, so they’re planting cacao trees instead. It’s evidence of how the market adjusts and continues to thrive. So maybe non-coffee producing agricultural regions will find themselves able to meet the coffee demand, in turn.)