Coffee price drops in Yunnan

In last few days, while many people were concerned about the higher priced Latte at Starbuck in China, the purchasing price of the coffee beans plummeted from 40 yuan per kilometer to 15 yuan/kg, and millions of coffee farmers in Yunnan felt anxious about the price of coffee they made every effort to grow.

According to the Coffee Association of Yunnan, the future prices of coffee in New York range from 110 to 115 cents per pound at present, which indicates that selling prices of coffee in Yunnan may not exceed 15 yuan per kilogram.

The Selling prices of coffee were lower than 15 yuan per kilogram. Coffee farmers in Yunnan are facing deficit situation.

 Yunnan's coffee farmers pluck coffee beans. [File Photo]

"What can I do if the selling prices fail to meet my planting costs?", a coffee farmer in Dehong said with worries.

In this harvest season of coffee in Yunnan, supposed selling prices of coffee fell from top price 40 yuan per kilogram to a low price below 15 yuan per kilogram, all endeavors in coffee planting in a past year by Yunnan farmers would come to nothing.

Coffee Association of Yunnan said that until 2013, coffee planting areas in Yunnan have reached 1,400,000 mu, on which predicted output of coffee may arrive at 100,000 tons. Both planting areas and predicted output in Yunnan cover 98% of China’s coffee market.

Yunnan coffee farmers’ worries on flagging price trend

 A Coffee Plantation in Pu'er, Yunnan.[File Photo]

Main coffee planting areas in Yunnan contain Pu'er, Dehong, Baoshan, Lincang, Xishuangbanna, etc., where millions of villagers are coffee farmers. A farmer from Pu'er provided his accounts: costs for fresh coffee beans per kilogram arrive at around 2.2 yuan; costs for processing coffee beans per kilogram attain 11 yuan; and costs for milling coffee powder per kilogram reach 14.67 yuan.

Hu Lu, Deputy Secretary General of Coffee Association of Yunnan, said:" 15 yuan per kilogram for coffee should be the lowest price in the sluggish market. Farmers are forced to lose money if the prices is lower than 15 yuan per kilogram. "

Harvest time of Yunnan's coffees comes. [File Photo]

However, Xiong Xiangren, Chairman of Coffee Association of Yunnan, suggested that farmers had better not give up planting of coffees. "After the recession passed, prices of coffee may rise to a new level. Generally speaking, a term of coffee price change is about 10 years. The flagging price trend may disappear soon. And maybe in 2015, Yunnan’s coffee price can rebound. "

Xiong Xiangren believed that at the time coffee price rebounding, all losses Yunnan's coffee farmers had borne before may be doubly compensated in the end.

"Only by doing like this, Yunnan's coffee industry can prosper ," Xiong said.

An ardent appeal for consuming Yunnan's coffee to domestic consumers

"Chinese coffee enterprises always desperately import coffee at a high price, and on the other hand they always crazily strive to export local coffees. It is a strange phenomenon that has existed for several year. " Li Gongqin, Secretary of Coffee Association of Yunnan, said.

However, Chinese coffee enterprises also felt embarrassed for this phenomenon. Since overseas markets were saturated during past two years, some Chinese coffee trade enterprises are confronted with big losses.

To sell Yunnan's coffees in domestic markets becomes all industry experts' common hope.

 Yunnan Xiaoli coffee(小粒咖啡), a kind of Arabica,which tastes moderately a little acid,but not bitter, is very suitable for flavors of Chinese coffee consumers.[File Photo]

By report, the coffee output in the province was 82,000 tons last year, exporting over 50,000 tons to foreign countries. Only less than 20,ooo tons of coffee were consumed by domestic markets. But the total consumption quantity of coffees last year in domestic markets reached 130,000 tons in 2012. Yunnan only accounted for a small proportion in domestic coffee markets.

Li Gongqin requested more cafes in China could consider using Yunnan's coffee. If those cafes can add "Yunnan Coffee" on their dish order lists, and more Chinese people consumed Yunnan coffee, millions of Yunnan coffee farmers’ concern could get relieved.

Coffee made in Yunnan, such as Xiaoli coffee(小粒咖啡), a kind of Arabica, which tastes moderately a little acid,but not bitter, is very suitable for flavors of Chinese coffee consumers.

Yunnan coffee farmers need to keep improving coffee quality

In 2008, Xiong Xiangren, president of Hogood coffee, expressed a dream in public: Let 700, 000,000 farmers in China drink coffee. Coffee is just a popular drink.

In China, most people treat coffee as an imported drink. To drink coffee represents a lifestyle of luxury consumption. However, Xiong said: "One kilogram of coffee berries could make around 50 cups of coffee drink. To judge coffee’s costs from the aspect of raw materials, the price of a cup of coffee is as that of tea, not expensive. "

 Yunnan coffee farmers pluck coffee beans by hand.[File Photo]

Some farmers from Pu'er discard poor-quality coffee beans in woven bags.[File Photo]

Xiong thought that the main reasons for high-level purchases of coffee lied in popularity degree, trust degree, cognition degree, costly house rent expenditure and employees' wages.

Li Gongqin, Secretary of Coffee Association of Yunnan, explained that although popularity of Yunnan’s coffee had been enhanced after hard works made by local coffee enterprises, and coffee quality had been accepted by many domestic consumers, local coffee enterprises still need to keep improving consciousness on controlling coffee quality.

Within the current downturn of Yunnan's coffee price, both coffee farmers and local enterprises shall pay more attention to improving quality. "Local enterprises can find differences from foreign coffee companies, and also can consider creating brands, but not just define themselves as simple raw material suppliers," Li said.

Every detail, including planting, processing, producing, marketing, branding, serving, image creating and managing, can be carefully learned by Yunnan farmers and local enterprises.

Thanks to various coordination conducted by Coffee Association of Yunnan, some of registered enterprises to the association had agreed to purchase Yunnan coffee at a uniform price of 15 yuan per kilogram(Level 1 coffee powder), without considering the price changes in New York as a reference.

Until now, Yunnan's local enterprises, those are engaged in deep coffee process in Dehong, Pu'er, Baoshan and other places, have actively afforded farmers' losses.

Click here to view Chinese report.    

(Editors: Cathy Chen, Lynn)

Copyright @Kunming Information Hub 2019. All Rights Reserved.