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High prices prompt new Fairtrade standards for coffee

By Guy Montague-Jones, 24-Mar-2011

Related topics: Fruit, vegetable, nut ingredients, Market Trends, Sustainable sourcing

Fairtrade International (FLO) has increased minimum prices and required price gaps for different Fairtrade coffees in reaction to the recent spike in prices.

Coffee commodity prices are edging towards highs that were last seen in 1977. FLO said this may be good news for individual farmers but some producer organisations have not benefited fairly.

It said some producers struggled to fulfill contracts because of poor harvests and others signed contracts early in the year and then watched prices rise to unexpected highs.

FLO has decided to amend its coffee standards to bring greater stability to Fairtrade coffee supply chains, ensure greater fairness in market gains and protect farmers when prices fall. The changes come into effect for contracts signed on or after 1 April this year.

One of the key problems that the new standards aim to address is the lack of investment in coffee farms caused by years of low prices.

Over the past decade many farms have been poorly cared for or even abandoned, according to Silvio Cerda, executive director of Red Café, an organisation representing small-scale coffee producers in Latin America.

The new FLO standards have therefore increased the Fairtrade premium and earmarked a portion of the increase to work on improving productivity and farm quality.

The full list of changes is given below: