(Footnote 4)
An interesting observation is made by Palacios (80), which might explain either the traditional stability of coffee pacts or the volatility of coffee prices: “Like rubber, tea, cacao, and bananas, coffee is only produced in the tropics, unlike cotton, leather, wood products, and sugar, which can be produced in the temperate zones. This fact explains the flexibility of international commercial policies as regards coffee during the last century. There were no ‘protectionist’ groups in the importing countries [...] Coffee has never been threatened by competition from consumer countries” That consumer countries are not protectionist is not entirely true, since Europe imposes heavy tariffs on roasted and processed (instant) coffees from Africa. Unlike the time-sensitive delivery of Arabica roasts, Robusta blends can be completely manufactured in the producing countries.
