Question
Please read the Article below and answer the following questions. Nestle will tighten quality controls on the coffee beans it buys, after tests flagged levels
Please read the Article below and answer the following questions.
Nestle will tighten quality controls on the coffee beans it buys, after tests flagged levels of the controversial weedkiller glyphosate that were close to regulatory limits.
The world's largest coffee company said in a statement Friday that ithad found glyphosate residues close to the maximum allowed in some deliveries of green coffee beans.
Glyphosate is the key ingredient in Monsanto's weedkiller, Roundup. In the United States, juries haveawarded huge monetary damagesto people who say their cancer was caused by exposure to glyphosate. Bayer, which owns Monsanto, says the herbicide is safe when used properly, as does the US Environmental Protection Agency.
Neumann Kaffee Gruppe (NKG), one of the world's largest traders, said glyphosate was one of a number of substances it monitored on the coffee it buys. Nestle buys some of its coffee beans from NKG.It was too early to say what consequences Nestle's tighter controls would have onNKG, a spokesperson said.
Nestle's(NSRGF)decision to increase the frequency of checks was unlikely to disrupt global coffee supply chains, a spokesperson said. "This is not a new process, we are just reinforcing controls," the spokesperson told CNN Business. Tests were done before the coffee was shipped from the countries of origin.
Nestle would start with suppliers in Indonesia and Brazil, since these countries are among the world's biggest coffee producers.
"Our agronomists will continue to work with coffee farmers to help them improve their weed management practices, including the appropriate use of herbicides and adoption of other weeding methods," the Swiss company said.
Brands such as Nescafe and Nespresso make up a sizable chunk of Nestle's powdered and liquid beverages business, which generated sales of 21.6 billion Swiss francs ($21.7 billion) in 2018. Nestle last yearagreed a dealto sell Starbucks' packaged coffees and teas around the world.
Does glyphosate cause cancer?
Glyphosate is used on more than 100 food crops, according to the EPA. Scientists at an environmental advocacy group with links to the organic food industrysayseveral popular breakfast cereals contain doses of the chemical that are higher than they consider safe for children.
Still, the EPA says glyphosate is not a carcinogen and that it poses no public health risks. Ecological risks include damage to pollinators and the problem of weed resistance, the EPA said in a statement in April.
But that has not stoppedthousandsof people from filing lawsuits against Monsanto alleging that exposure to Roundup caused them or their loved ones to develop cancer.
Earlier this year, a jury ordered Bayer to pay a California couple$2 billionin damages after they claimed that Roundup, used on their property for more than three decades, had given them both Non-Hodgkin lymphoma within four years of one other. Bayer is contesting the verdict.
A 2015 study by the World Health Organization's International Agency for Research on Cancer found that glyphosate was "probably carcinogenic to humans," based on "limited" evidence of cancer in humans and "sufficient" evidence of cancer in experimental animals.However, a joint panel of the WHO and the United Nations Food and Agriculture Organization later concluded that glyphosate is unlikely to pose a carcinogenic risk to humans from exposure through diet.
- Nestle plans to increase the frequency of checks for glyphosate in the coffee beans it purchases. Name the two countries where these checks will begin. In what product is glyphosate the key ingredient?
- Explain how the reaction of Nestle to the discovery of glyphosate in coffee beans will influence the market for coffee. Everything else remaining the same, is there a change in demand, a change in supply, a change in the quantity demanded, or a change in the quantity supplied?
- If people believe that glyphosate is a carcinogen and if they believe that coffee contains glyphosate, what will happen in the market for coffee, everything else remaining the same?
- If the events in Question 2 and Question 3 occur simultaneously, how will the equilibrium price and equilibrium quantity of coffee change?
- Draw a diagram of the coffee market if the events in Question 2 and Question 3 occur.
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