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Coffee crisis

Vietnam is the second-largest producer of coffee in the world because of a crisis in 1970s East Germany.

If there’s one true thing to remember in this world it is this: do not get between a coffee drinker and their coffee. Nothing good can result.

In 1970s East Germany, coffee was a scarce and expensive resource. According to Wikipedia households spent as much on coffee as they did on furniture, and twice as much as they spent on shoes. In 1976 the coffee harvest in Brazil failed, and that drove supply into the ground and demand into the stratosphere. The government reacted by introducing a mix that was 51% coffee and 49% filler (for example pea flour), but that nearly triggered a revolt among disgusted coffee drinkers.

The East German government also had a political dimension to worry about. Gifts of coffee from relatives in West Germany flooded in, accounting for up to a quarter of all coffee supplies in East Germany, and that was creating warm feelings between the two countries that the ruling party must have seen as a threat. They needed a long-term solution.

That solution was Vietnam. Vietnam had been producing coffee for many years, but their major coffee-producing region was directly between north and south Vietnam and had pretty much been emptied out by the Vietnam War. East Germany signed a treaty with Vietnam, gifting them agricultural machinery, irrigation technology, schools, hospitals, houses, and training in coffee cultivation. In exchange, Vietnam promised to sell half of their coffee to East Germany once their coffee production kicked into high gear.

The first such treaty was signed in 1980. It took two years to get the crops planted, and a further eight years for them to mature. Around the time that the first harvest would have gotten to East Germany, a certain wall had come down and the deal became moot. Nevertheless, Vietnam is now the second-largest producer of coffee in the world (behind Brazil), and much of its coffee still goes to reunified Germany.

Categories: Asia Economics & business Europe Food & agriculture History Modern history Places Politics & law Sciences

The Generalist

I live in Auckland, New Zealand, and am curious about most things.

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