Supply

An interesting point of discussion when teaching supply (both price and non-price determinants). Helpful with practicing drawing ‘movements and shifts’. Also very useful for IB Economics pupils wanting ‘relevant examples’ for those key analysis and evaluation points.

Starbucks concerned world coffee supply is threatened by climate change

Starbucks sustainability chief Jim Hanna says the coffee giant has been pushing the Obama administration to little result

Forget about super-sizing into the trenta a few years from now: Starbucks is warning of a threat to world coffee supply because of climate change.

In a telephone interview with the Guardian, Jim Hanna, the company’s sustainability director, said its farmers were already seeing the effects of a changing climate, with severe hurricanes and more resistant bugs reducing crop yields.

The company is now preparing for the possibility of a serious threat to global supplies. “What we are really seeing as a company as we look 10, 20, 30 years down the road – if conditions continue as they are – is a potentially significant risk to our supply chain, which is the Arabica coffee bean,” Hanna said.

It was the second warning in less than a month of a threat to a food item many people can’t live without.

New research from the International Centre for Tropical Agriculture warned it would be too hot to grow chocolate in much of the Ivory Coast and Ghana, the world’s main producers, by 2050.

Hanna is to travel to Washington on Friday to brief members of Congress on climate change and coffee at an event sponsored by the Union of Concerned Scientists.

The coffee giant is part of a business coalition that has been trying to push Congress and the Obama administration to act on climate change – without success, as Hanna acknowledged.

The coalition, including companies like Gap, are next month launching a new campaign – showcasing their own action against climate change – ahead of the release of a landmark science report from the UN’s IPCC.

Hanna told the Guardian the company’s suppliers, who are mainly in Central America, were already experiencing changing rainfall patterns and more severe pest infestations.

Even well-established farms were seeing a drop in crop yield, and that could well discourage growers from cultivating coffee in the future, further constricting supply, he said. “Even in very well established coffee plantations and farms, we are hearing more and more stories of impacts.”

These include: more severe hurricanes, mudslides and erosion, variation in dry and rainy seasons.

Hanna said the company was working with local producers to try to cushion them from future changes.

“If we sit by and wait until the impacts of climate change are so severe that is impacting our supply chain then that puts us at a greater risk,” he said. “From a business perspective we really need to address this now, and to look five, 10, and 20 years down the road.”

guardian.co.uk © Guardian News and Media 2011
http://www.u.tv/News/Starbucks-concerned-world-coffee-supply-is-threatened-by-climate-change/fdf3ad33-7328-47de-921b-398b85bec3fb