Sudden changes in coffee prices respond mainly to three types of factors:
1. Technical factors, such as the relationship between the price of the currencies of all countries, the behavior of the futures markets for major metals (gold, copper), food products (grains, cocoa) and oil, as well as the economic performance of countries in the north.
2. Supply and demand (the amount of physical coffee on the market: that is, the amount of coffee that is produced or will be produced, versus the amount to be consumed or that buyers want) and
3. Speculative factors: that is, the money that various investment funds and the world's most wealthy investors inject into the stock market.
At certain times, some of these factors cause the coffee market to become a distorted and reduce opportunities for the country's producers to obtain better incomes from their crops.
To cope with the effects of these factors, in CEPCO, as the business organization of small producers that we are, we have spent a few years developing certain strategies to differentiate our product. The two most important are:
• specialization in the quality of our coffee, and
• sales in specialty markets that pay better and have less price volatility, such as: Specialty Coffees, Organic Coffees, and Fair Trade Coffees, where indeed we have advantages because they are markets linked to the values of environmental and social responsibility, added values that are not themselves the product but rather results of our organization, our work, and the way we produce coffee.
These markets, which is where we concentrate our sales, have certain requirements and advantages we already know about, such as:
• they are regulated by international certification standards.
• they guarantee minimum prices that are higher than those of the mainstream market,
• they offer price levels that are more stable and predictable, which allows us to provide to producers and sellers greater certainty and confidence in the business we do each year.
Against this background, we believe that our objectives in terms of collecting, processing, and marketing coffee are:
• to add value to our product based on quality,
• to promote increased production yields through organic farming,
• to differentiate our offerings on the market by our social and environmental responsibility,
• to pay attention to efficiency throughout the commercialization process, reducing the costs of collection, administration, organization, processing, and sales,
• to consolidate our involvement in specialty markets.