Letter of clarification - Fairtrade International信澄清公平贸易的国际.pdfVIP

th October 30 , 2012. Letter of clarification Fairtrade Standard for Coffee Market Prices, Differentials, Premium Background: Currently, market prices for coffee are higher than the Fairtrade Minimum Price. In this case, traders and producers are to agree coffee prices using the Fairtrade reference for market prices as follows in the case of Fairtrade organic coffee: Reference market price + Fairtrade + Fairtrade = Fairtrade (never below Fairtrade Minimum Price) Organic Premium Price differential NY C or LIFFE + prevailing (in case of organic differential coffee ) However, some Fairtrade contracts tend to mention only one lump sum differential, which brings together the prevailing differential, organic differential and the Fairtrade premium. For the past few months, a tendency of lowering the lump sum differential has been observed, especially for Fairtrade organic coffee from Peru and Central America: in Peru for instance, while the prevailing differential for MCM HB coffee in the conventional market is around 0 to -5, lump sum differentials of current contracts for Fairtrade organic coffee have been observed at +30 (which implies a prevailing differential of -20). This is clearly significantly below the conventional prevailing differential, and effectively could be seen as not paying the correct premium amount, which is a non-compliance. Also, some prices have been fixed automatically through the use of a stop loss clause, without consultation of the producer, which is a clear breac