Yes, oil is a commodity without which the world as we know it cannot exist without. But there’s another commodity that’s equally important but doesn’t get the press that OPEC does. It’s coffee. We all know people who simply cannot get started without their morning cup of Joe. The usual unreliable sources have been murmuring about the emergence of a new organization that will do for coffee what OPEC does for oil. It’s OCEC, the Organization of Coffee Exporting Countries.
According to 2019 statistics, the five countries that produce the most coffee are Brazil, Vietnam, Columbia, Indonesia and Ethiopia. Following close behind are Honduras, India, Uganda, Mexico, and Guatemala. In 2020/2021, global coffee production reached 175.35 million 60-kilogram bags, or approximately 23 billion pounds. At current producer market price, that is about $50 billion.
OPEC is often referred to as a cartel that cooperates to control the crude petroleum market. But its members are not companies, but countries. As such, the OPEC members cannot be sued for restraint of free trade or other national laws regarding commerce due to state immunity provisions of international law. The same would hold for OCEC.
Like the OPEC cartel that has almost rigid control over the price of crude oil, OCEC could control the output of raw beans on the open market, driving up the price of coffee, currently about $2.30/pound. Here’s a little data to give you an idea of the value of coffee. A barrel of oil weighs about 300 pounds and it costs about bout $112/barrel or about $.37/pound.
Just as OPEC deals with its major buyers, the so called Seven Sisters (historically BP, Shell, Chevron, Gulf, Texaco, Exxon and Mobile) so OCEC will deal with the Five Roasters (McCafe/McDonalds, Costa/CocaCola, Tim Horton/Restaurant Brands, Dunkin’ Donuts/Inspire Brands, and Starbucks). These ten countries and the Five Roasters will control coffee prices and distribution worldwide. For those who remember the petrol shortages of years back, consider what happens when OCEC cuts down on raw coffee bean exports to drive up the price, you can only imagine how long the lines are going to be at Starbucks and Dunkin’ Donuts. How many people will be half awake at work? Will you have a caffeine withdrawal headache in the early afternoon without your cup of Joe? Don’t think you can substitute energy drinks. They get their caffeine from coffee beans.
OCEC just announced their spokesperson will be Juan Valdez. OK, he’s a fictional character, but a recognizable symbol of coffee production.
More OCEC news as it breaks.