Hi friends, this is part two of a conversation with Rachel Northrop, freelance writer and PhD student about coffee markets. If you haven’t listened to part one, I highly suggest you do since a lot of this won’t make sense. 

But just a quick recap—in part one, we talked about how coffee is traded, how contracts for trading coffee work, and what a coffee futures market looks like. Most of what we talked about was foundational, explaining the history of commodity markets and their original intent. In part two, we now talk about their application: how do coffee markets affect the actual price of coffee? Why is the commodity price for coffee far, far below the cost of producing coffee? Coffee is traded at around $1 per pound, but the cost to produce coffee is often two to three times that amount—how does that work? This is where we move past the theoretical and move to impact and talk about the way markets are designed to exploit the labor of others, oftentimes exploiting the labor of people in countries that have been colonized by those in power. 

Rachel mentions this a few times during our conversation, but she’s not a coffee trader, rather a writer and inquisitive member of the coffee industry, and she spends a long time breaking down really, really complex ideas. I hope you learn as much as I did from her candid discussion. Here’s Rachel.