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Business EconomyPosted at: Nov 7 2018 9:06AM


Whether some farmers will be driven out of business because of declines in Chinese imports and lack of compensating demand from elsewhere remains a big question mark.
Output in sub-Saharan Africa as a whole, where cassava is a major food crop, is expected to grow by around 2.0 percent to reach a record level of 161 million tonnes. This would translate into a per capita availability of cassava as food of around 86 kilograms, a slight decrease from the year before due to faster population growth in the region.
Coffee prices on international markets are today less than 45 per cent in real terms than their levels in 2011, a protracted decline that is rekindling memories of the sector's crisis in the early 2000s.
As coffee is the most widely traded tropical product and generates sizable export earnings for countries that rely on food imports to meet their needs, the precipitous price fall is a concern, especially as it impacts the living standards of the roughly 25 million smallholder producers around the world who account for 80 per cent of the world output.
The role of coffee can be large - it accounts for more than two-thirds of agricultural exports in Burundi and close to, or more than, a third in Colombia, Ethiopia, Honduras, Rwanda and Uganda, triggering significant multiplier effects on employment and incomes and increasing migration pressures, notes FAO economist El-Mamoun Amrouk.
While various factors, including slow consumption growth and possibly excess market power by the major coffee roasters, may play a role, weak coffee prices are largely the result of oversupply conditions in world market. This year's production is expected to reach 170 million bags, a record high, and add to the global inventories, which are also at an all-time high.
Last month, coffee growers from more than 30 countries appealed to chief executives in the coffee industry for coordinated action to mitigate the impact of depressed prices.
Some sort of coordinated international action is required to tackle the problem, yet what is urgently needed is cooperation that ensures the reasonable expansion of the sector, according to FAO.
As price changes affect smallholder coffee growers with much greater speed and intensity than consumers, a promising strategy would be to create more value-added coffee products at origin, El-Mamoun says, noting that this would require major importing countries to reduce their often-constraining tariffs on processed coffee products.
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