The future of Yunnan coffee industry: how to play chess?

In the past week, two things have happened in the Yunnan coffee industry: in three days, two coffee trading centers have been listed. On the afternoon of July 9, the Pu'er municipal government signed a contract with Yunnan Jinyuan Flower Industry Co., Ltd. "Yunnan Coffee Trading Center" project, announcing that the Yunnan Coffee Trading Center project was officially launched and settled in Pu'er. On the afternoon of July 12, more than 20 coffee enterprises set up a preparatory committee for Yunnan Coffee spot Trading Center in Kunming.

It happened suddenly. For a time, both inside and outside the industry were wondering what was going on in the coffee industry in Yunnan.

The "counterattack" of the industry

At present, Pu'er City has a total coffee planting area of 716000 mu and a coffee output of 45000 tons, ranking first in the province in terms of planting area and output. More than 80,000 tons of coffee were traded in Pu'er in 2013, accounting for 85% of the country's total coffee production. In this context, the Pu'er municipal government cooperates with enterprises to set up Yunnan Coffee Trading Center, hoping to give full play to the advantages of government integration of resources and enterprise market operation, and achieve complementary resources and strong combination.

However, as soon as the Yunnan Coffee Trading Center was established, it immediately encountered a "counterattack" in the industry. More than 20 coffee enterprises, including Yunnan Zhengding Coffee Co., Ltd., spontaneously set up the "Yunnan Coffee spot Trading Center Preparatory Committee" to explicitly target Pu'er 's move.

The reason for the strong reaction from Yunnan coffee companies is that the trading center of Pu'er is dominated by a flower company. "We do not agree that the trading center should be listed by companies outside the industry," Zhu Zhihang, chairman of Yunnan Xiaozhixiang Trading Co., Ltd., said the original intention of the coffee company.

Lin Yingxue, chairman of Yunnan Zhengding Coffee Co., Ltd. also holds the same view: "the trading center should be in the hands of the same industry." He believes that the development of the industry should be market-oriented and manipulated by experts, and the spot trade of coffee in Yunnan is growing at a rate of 15% every year. "the idea of free Sanda is not feasible."

Representatives of coffee companies prefer coffee companies to take the lead in setting up trading centers. Yang Zhiqi, executive vice president of Yunnan Coffee Industry Association and chairman of Yunnan Lincang Lingfeng Industrial Group, believes that judging from the current situation, coffee enterprises may be able to achieve better results if they jointly participate in the trading center. Coffee enterprises not only understand the industry better, but also have common aspirations.

As to why a flower company was chosen as the main body of the trading center, the local government of Pu'er, when convening a meeting of local coffee enterprises, said that it hoped to introduce third-party companies that did not directly participate in the coffee industry chain and strive for fairer transactions in the future.

Explaining the two listings last week, Li Gongqin, secretary general of the Yunnan Coffee Industry Association, said that the Yunnan Coffee Trading Center was listed in Pu'er City and a flower company in Pu'er City, not in the industry. the idea of the Coffee Association is to establish a general trading center in Kunming and sub-centers in various producing areas.

Li Xiaobo, vice president of the Yunnan Coffee Industry Association, believes that most of China's coffee is grown in Yunnan, but China's coffee production accounts for less than 1% of the world's coffee production. If this resource is split again, it may even be less than 1/1000, and there will be even less space. The development of the industry is inseparable from the industry lead. The establishment of a unified trading center in Yunnan can not only allow foreign buyers to buy Yunnan coffee directly in the center, but also facilitate Yunnan to keep abreast of international market trends and guide farmers' production.

Jia Xiaoyi, vice president of the Yunnan Coffee Industry Association, said that only a professional and authoritative trading center can bring about the development of the industry, and he hopes that Yunnan coffee enterprises will use a sense of mission to do business.

It is understood that the establishment of a spot trading center must be approved by the provincial government, and the futures trading center must be submitted to the State Council for approval by the provincial government. At present, the provincial government has not given a reply to the two trading centers.

Who will manage the market?

Yunnan coffee industry started relatively late, compared with the development of coffee industry in other countries, it is still in the initial stage of development. Over the years, the development of Yunnan coffee industry is lack of standardization and guidance, and has always been lack of discourse and pricing power.

In 2013, Yunnan coffee suffered from drought in the early stage and frost disaster in the later stage, causing huge losses. Learning from the bitter experience, participants in the coffee industry took action to actively study the collection and storage mechanism of Yunnan coffee, while actively promoting the construction of Yunnan coffee spot trading center. In the second half of last year, Yunnan Coffee Industry Association began to actively promote the construction of "Yunnan Coffee spot Trading Center". Due to various reasons, the work has been delayed for a long time.

Xiong Xiangren, president of Yunnan Coffee Industry Association and chairman of Hougu Coffee, analyzed that Yunnan coffee has a planting area of 1.8 million mu, and according to the scheduled price, the agricultural output value has reached 7.5 billion yuan. it can be predicted that after 2018, China will enter the coffee consumption market blowout period, and the output value of Yunnan coffee will have a huge increase. He believes that a well-developed industry must be United, and the coffee industry should pool the efforts of the whole province and play "a game of chess." An important step in this game of chess is to establish a unified coffee trading center in Kunming.

In the design of the association, the coffee trading center is a platform for financial services "agriculture, rural areas and farmers" and a platform for financial service enterprises. Farmers can freely choose the timing of sales, and enterprises can obtain overall packaged credit financing. After two to three years of real development, the trading center can become the carrier of docking with the international coffee organization and gain the voice and pricing power of Yunnan coffee.

At present, coffee cultivation in Yunnan Province is in a state of "four columns and five columns": Pu'er, Dehong, Baoshan and Lincang are the four main producing areas, surrounded by Xishuangbanna, Honghe, Wenshan, Dali and Lijiang, each of which has its own advantages. however, if every reasonable producing area sets up a trading center, the Yunnan coffee industry is bound to be "torn apart". Hu Lu, deputy secretary general of the Association, said that the construction of a coffee trading center in Kunming has several major advantages: the geographical location can take into account the interests of various producing areas, the most concentrated financial environment, the advantages of sea, land and air transportation, and colleges and universities have the advantage of talents. Excellent climatic conditions for coffee storage. From any dimension, Kunming is the best place to establish Yunnan coffee trading center.

Chinese coffee is produced in Yunnan. Yunnan needs to play a big game of chess if its resource advantage is to be transformed into capital advantage. This game of chess has come alive, laying the foundation for the next step in block trading and futures trading, and making it no longer a dream for Kunming to become an Asian coffee trading center.

Thinking and reality, can Kunming do it or not? This requires all people in the Yunnan coffee industry to think about it.