ABSTRACT
In 1999, an unexpectedly large coffee harvest flooded global markets, even though speculators had been predicting slightly lower productivity. Around the world, coffee prices slid, and then collapsed. As the bottom fell out of the market, the price fell below the cost of production. The coffee crisis of 1999–2003 was only the latest in a series of calamities associated with coffee production and markets in the last 250 years. The volatility in coffee markets can be traced in part to two principal characteristics of coffee production. During the past 500 years, fluctuations in supply also related to the disproportionate importance of a few major coffee-producing countries—starting with Yemen, then Java, then St. Domingue (Haiti), and most recently Brazil. When their harvests have failed, global market prices have risen; when harvests have been large, global market prices have fallen.
