Co-operatives and competition in local coffee markets: The case of Chiapas, Mexico

Every year more than 6 million tons of coffee is produced in different parts of the world, mainly in developing countries in Africa, Asia and Latin America. Because there is little scope for economies of scale in coffee production, most of the producers are smallholders (Oxfam 2001). Coffee is a typical tropical cash crop, about three quarters of it is exported, mostly to industrialized countries (ICO 2009). Due to inelastic supply and demand, the international coffee prices are highly fluctuating. Furthermore, a stronger increase in supply than demand has resulted in a general downward trend (Lewin et al. 2004).nhhph