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The passage is based on a document published in 2005. The rate of growth in global coffee consumption has been...

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The passage is based on a document published in 2005.

The rate of growth in global coffee consumption has been falling behind the rate of growth in global production, creating a scenario of recurring price crises that take a heavy toll on coffee producing countries. Programs to expand coffee consumption in coffee producing countries can improve the situation and make the cyclical crises less acute.

In mature markets, costs to increase consumption are probably higher than in emerging markets, such as Brazil, the largest coffee producer. The case of Brazil shows that probably the highest returns for institutional investments to develop coffee consumption are to be found in the emerging markets of coffee producing countries. A Brazilian institutional investment valued at US$25 million in 10 years brought about an increase in yearly coffee sales worth 40 times as much. Promotion of coffee consumption in coffee producing countries is likely to represent the best investment of scarce promotion resources because of this multiplier effect. There are huge gaps in per capita consumption between Brazil and many other smaller producers, some (such as Indonesia) with large populations.

It is often argued that the Brazilian promotion program worked only because there was a marked income increase within the same period. But income increases alone, without promotion, are not sufficient to increase coffee consumption. Actually, for the 20 years up to 2003 in Brazil, it was only during the period 1993 to 1998 that coffee consumption increased as income was increasing.

Ques. 1/3

For each of the following statements, select Yes if, based on the information provided in the passage or the first graph or both, the statement would have been true in 2003. Otherwise, select No.

A
Yes
No

Coffee production and per capita coffee consumption in Brazil are significantly higher than in most of the major coffee producing countries.

B
Yes
No

The coffee consumed in the major coffee producing countries comes entirely from domestic production.

C
Yes
No

As a means of boosting world coffee demand, increasing consumption of domestically produced coffee has greater potential in India than in China.

Solution

OWNING THE DATASET

Understanding Source A: Text Source - Discussion (2005)

Information from Dataset Analysis
""The rate of growth in global coffee consumption has been falling behind the rate of growth in global production, creating a scenario of recurring price crises that take a heavy toll on coffee producing countries.""
  • Coffee production is growing faster than consumption globally
  • This oversupply causes repeated price crashes
  • Inference: There is a global oversupply of coffee relative to demand that causes cyclical price drops harming producing countries
""Programs to expand coffee consumption in coffee producing countries can improve the situation and make the cyclical crises less acute.""
  • The solution proposed is to increase domestic consumption in producer countries
  • Inference: Increasing domestic consumption in producer countries could help absorb some excess supply
""A Brazilian institutional investment valued at US$25 million in 10 years brought about an increase in yearly coffee sales worth 40 times as much.""
  • Brazil spent $25 million over 10 years on consumption promotion
  • This generated $1 billion in annual sales (40× return)
  • Inference: Brazil's program demonstrates high ROI for consumption promotion in emerging markets
""There are huge gaps in per capita consumption between Brazil and many other smaller producers, some (such as Indonesia) with large populations.""
  • Brazil consumes much more coffee per person than other producing countries
  • Countries like Indonesia have many people but drink little coffee
  • Inference: Countries like Indonesia have large populations but low consumption, suggesting potential for growth
""For the 20 years up to 2003 in Brazil, it was only during the period 1993 to 1998 that coffee consumption increased as income was increasing.""
  • Coffee consumption and income growth rarely happen together
  • Only 1993-1998 showed both trends increasing
  • Inference: Income growth alone doesn't automatically increase coffee consumption; promotion efforts are necessary
  • Summary: This document argues that coffee-producing countries should invest in domestic consumption promotion programs to address global oversupply problems, using Brazil's successful $25 million program that generated 40× returns as a model.

Understanding Source B: Graph - Coffee Consumption in Major Coffee Producing Countries (2003)

  • Chart Analysis:
    • Shows coffee production volumes (x-axis) vs. per capita consumption (y-axis) for major producing countries
    • Bubble sizes represent relative population sizes
    • Brazil shown separately with consumption only (4.5 kg per capita)
  • Key patterns observed:
    • Brazil has the highest per capita consumption at 4.5 kg/year
    • Major Asian producers (Vietnam ~11.2M bags, Indonesia ~6.8M bags) have very low consumption (0.4-0.6 kg/capita)
    • Central American countries show moderate consumption (2-3 kg/capita) despite smaller production
    • India and China have minimal consumption (~0.1-0.3 kg/capita) despite large populations
  • Inference: Most major coffee producers have low domestic per capita consumption except Brazil, revealing significant disconnect between production volumes and domestic consumption rates
  • Linkage to Source A:
    • This graph quantifies the ""huge gaps in per capita consumption"" mentioned in Source A
    • Brazil's 4.5 kg consumption validates Source A's claim about Brazil's success
    • The low consumption in countries like Indonesia (0.6 kg) with large populations confirms Source A's identification of untapped market potential
  • Summary: The graph reveals that most major coffee producers consume very little domestically compared to Brazil, with Asian producers showing particularly low consumption despite high production volumes and large populations.

Understanding Source C: Graph - Per Capita Coffee Consumption vs. Monthly Income in Brazil (1986-2003)

  • Chart Analysis:
    • Shows Brazil's per capita coffee consumption (bars) and monthly income (line) from 1986-2003
    • Consumption measured in kg/person/year, income in Brazilian reais
  • Key patterns observed:
    • 1986-1989: Low consumption (2.5-2.7 kg) with volatile income (250-335 reais)
    • 1990-1998: Steady consumption growth from 3.3 to 4.5 kg
    • 1999-2003: Consumption continues rising to 4.9 kg despite income declining from 315 to 240 reais
    • Income peaked around 1998-1999 but consumption kept growing
  • Inference: Brazil's per capita coffee consumption nearly doubled from 1986-2003, with most growth in the 1990s, and consumption remained high despite later income declines
  • Linkage to Source A:
    • The 1993-1998 period shown here corresponds exactly to Source A's claim about the only period when ""coffee consumption increased as income was increasing""
    • The post-1998 data validates Source A's point that income growth alone doesn't drive consumption - consumption kept rising despite falling income
  • Linkage to Source B:
    • This chart shows how Brazil reached the 4.5 kg consumption level shown in Source B
    • The doubling from ~2.5 to ~4.9 kg represents the success of the promotion program mentioned in Source A
    • While Brazil's consumption grew dramatically, Source B shows other producers remained at low levels
  • Summary: This chart demonstrates how Brazil's $25 million promotion program (Source A) doubled consumption from 2.5 to 4.9 kg, achieving the 4.5 kg level shown in Source B, while other major producers like Vietnam and Indonesia (Source B) remained at under 1 kg despite large populations, proving targeted promotion works better than relying on income growth alone.

Overall Summary

  • The three sources together reveal that coffee-producing countries face a global oversupply crisis that could be addressed through domestic consumption promotion
  • Brazil's experience proves this strategy works - investing $25 million over 10 years doubled per capita consumption from 2.5 to 4.9 kg and generated $1 billion in annual sales
  • Meanwhile, major producers like Vietnam, Indonesia, and India consume less than 1 kg per capita despite large populations, representing billions in untapped domestic sales potential
  • The key insight is that consumption growth requires active promotion programs, not just economic development, as Brazil's consumption continued rising even when incomes fell

Question Analysis

  • In Plain Terms: Evaluate whether each of the three statements about coffee production and consumption in 2003 is true or false based on the passage and the first graph
  • Key Constraints:
    • Use only information from the passage and the first graph
    • Consider data specifically from the year 2003
    • Answer is binary for each statement: Yes if true, No if false
  • Answer Type Needed: Truth value (Yes/No) for each statement

Connecting to Our Passage Analysis

  • Analyze data on Brazil's coffee production and per capita consumption relative to other major coffee producers
  • Verify sources of coffee consumed domestically
  • Compare potential for increasing domestic coffee consumption in India versus China based on production and consumption data
  • Can Answer from Analysis Alone: Yes

Key Findings

  • Brazil's per capita coffee consumption is 4.5 kg and production is above 6.8 million bags, which is higher than most major coffee producers
  • The graphs and passage do not provide information on import-export flows related to domestic consumption
  • India produces about 4.8 million bags with low per capita consumption (0.1 kg), China produces about 0.8 million bags with per capita consumption of 0.3 kg
  • Expected Results: Statement 1 and 3 are true; Statement 2 is false based on available information

Statement 1 Evaluation

  • Statement: Brazil's coffee production and per capita consumption are significantly higher than most major producers
  • Brazil's consumption is 4.5 kg per capita, higher than other countries mostly below 2 kg
  • Production also higher than major producers shown
  • Other major producers have lower consumption and production figures
  • Brazil leads substantially in both consumption and production
  • YES

Statement 2 Evaluation

  • Statement: Coffee consumed in major producing countries comes entirely from domestic production
  • No data in sources about coffee imports or exports related to domestic consumption
  • Sources provide only production and consumption data without details on trade flows
  • Cannot confirm the claim; absence of supporting evidence
  • NO

Statement 3 Evaluation

  • Statement: India has greater potential than China to boost domestic coffee consumption due to production levels
  • India's production (4.8 million bags) is much higher than China's (0.8 million bags) despite lower per capita consumption
  • China has higher per capita consumption (0.3 kg) but much lower production
  • India's higher production base suggests more potential to increase domestic demand
  • YES

Review of Key Data Points

  • Brazil's per capita consumption and production figures in 2003 are clearly higher than most major producers (supported by passage and graph)
  • No evidence of coffee import/export details to support Statement 2 in either source
  • India's high production volume coupled with low consumption indicates potential for growth greater than China's smaller production despite China's somewhat higher per capita consumption

Final Answer

  • [YES, NO, YES]
Answer Choices Explained
A
Yes
No

Coffee production and per capita coffee consumption in Brazil are significantly higher than in most of the major coffee producing countries.

B
Yes
No

The coffee consumed in the major coffee producing countries comes entirely from domestic production.

C
Yes
No

As a means of boosting world coffee demand, increasing consumption of domestically produced coffee has greater potential in India than in China.

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