Coffee is a truly global commodity and a major foreign exchange earner in many
developing countries. The global coffee chain has changed dramatically as a result of deregulation,
new consumption patterns, and evolving corporate strategies. From a balanced contest between
producing and consuming countries within the politics of international coffee agreements, power
relations shifted to the advantage of transnational corporations. A relatively stable institutional
environment where proportions of generated income were fairly distributed between producing and
consuming countries turned into one that is more informal, unstable, and unequal. Through the
lenses of global commodity chain analysis, this paper examines how these transformations affect
developing countries and what policy instruments are available to address the emerging
imbalances. 2002 Elsevier Science Ltd. All rights reserved.