Mild Arabica coffee trade at a time of market regulation

Abstract

This paper explores the dynamics of mild coffee trade during the term of the International Coffee Agreement, focusing on Costa Rica as a case study. We aimed to verify the influence of the agreement on coffee exports and understand its impact on the exports of high-quality coffee. To compare the influence of the coffee agreement on the trade performance of high-quality coffee producers with that of producers specializing in coffee of similar – or lower – quality, we also included exports of Brazilian coffee (low quality) and Colombian coffee (high quality) in the sample. We focused on analysing commodity trade agreements in the second half of the twentieth century and, simultaneously, on the drivers of coffee exports based on a gravity equation consistent with international trade models. Our findings allowed us to conclude that the International Coffee Agreement gave rise to few benefits for ‘Other Milds’ countries such as Costa Rica and greater benefits for ‘Colombian Milds’ countries such as Colombia, at least in its early versions.