Acknowledgements  vi

Abbreviations and acronyms  vii

Executive summary  ix

1. Introduction  1

2. Recent price developments for coffee, cocoa and tea global markets  3

2.1. Stylized facts about agricultural commodity prices  4

2.2. Market situation and price trends for beverage commodities  7

2.3. Key factors impacting the beverage commodity markets  25

3. Structural drivers of global beverage prices  31

3.1. Introduction  31

3.2. Modelling commodity price dynamics: the role of storage and expectations  34

3.3. Selection of the main drivers of the global beverage prices  37

3.4. Estimating the dynamics of global beverage prices with a Bayesian Structural Vector Autoregressive model (BSVAR)  41

3.5. The impacts of global shocks on beverage commodity prices  46

4. Transmission of global beverage price shocks to producers and consumers  59

4.1. Introduction  60

4.2. Transmission of global price shocks in beverage markets  61

4.3. A brief description of the beverage value chains  63

4.4. Estimating the transmission of price shocks in the beverage commodity markets  69

4.5. The impact of global price shocks along the value chain  74

5. A way forward: building resilient, efficient and inclusive beverage value chains  85

5.1. Key analytical insights  85

5.2. Building resilience to price shocks and volatility in beverage value chains  87

5.3. Supporting efficiency and transparency across domestic and international markets  88

5.4. Promoting an equitable and inclusive upgrading in the beverage value chains  90

Annexes  93

References  105