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Practitioners’ Perspectives | The Multiple Dimensions of Risk in the Coffee Sector
Presentation at the FARMD Annual Conference “Price Volatility and Climate Change: Implications for the Ag-Risk Management Agenda.” Zurich, June 9-10, 2011.
FARMD (July 2011) | FARMD invited Jose Setté, Executive Director i.a. of the International Coffee Organization (ICO), to provide perspectives on the risks affecting the coffee sector; the relative importance of ‘price risks’ in the performance of the sector; and the implications of all these on producers and traders alike.
In his presentation, Jose Setté discussed the main categories of risk affecting coffee, from the farm-gate outwards, which, in his view, can be categorized as: physical and security risks; quality and value risk; performance (counterpart) risks; and price & market risks. Before discussing the importance and implications of each of these types of risks, Mr. Setté presented an overview of the trajectory of international prices for coffee, since the early 1990s. He concluded his presentation by highlighting the role of the International Commodity Bodies (ICBs) in strengthening risk-management capacities, including support for the provision risk-management tools (particularly targeting smallholders), adoption of coping strategies and increased market transparency.
Setting the context