The difference between Yunnan International Coffee Trading Center and Pu'er Coffee Trading Center where to buy coffee in Pu'er

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According to Zhengzhou Commodity Exchange, Zheng Shangsuo and Yunnan Securities Regulatory Bureau held a forum on the feasibility of coffee futures in Kunming last week to solicit opinions and suggestions on the feasibility of listing coffee futures. Qin Quanjin, deputy general manager of Zheng Shang Institute, Qi Li, deputy director of Yunnan Securities Supervision Bureau, and heads of Yunnan Dianzi Biology Company, Hongta Futures and other related institutions attended the meeting.

After discussion, the participants agreed that listed coffee futures are of great significance to China's coffee industry. At present, listed coffee futures also have a certain feasibility.

If coffee futures succeed, then Yunnan's coffee industry is expected to get financial help, but Yunnan's local coffee trading platform may be eliminated.

Chinese Coffee looks at Yunnan

Wind data show that China's raw coffee consumption exceeded 180000 tons for the first time last year, which is still a far cry from the combined annual consumption of Japan and South Korea, which are also located in East Asia. However, compared with 11400 tons in 2003, China's raw coffee consumption has increased by about 15 times over the past 13 years, with a compound annual growth rate of nearly 24 per cent, much higher than the global average growth rate of 2 per cent.

In 2016, China produced 140000 tons of raw coffee, accounting for 1.5% of the world's total output, while Yunnan Province produced 139000 tons of raw coffee, accounting for more than 99% of the country's total output.

Yunnan is one of the earliest provinces in China to grow coffee. At the end of the 19th century, missionaries from Europe went to Yunnan Dali and other places to preach, bringing coffee seeds to Yunnan. In the early stage after liberation, Baoshan Lujiangba was successfully planted, and it was found that it had good adaptability and good quality, and it continued to grow.

In 1988, the multinational Nestl é Group shifted its attention from Latin America to Pu'er at the same latitude as the coffee hometown of Cuba, and cooperated with the local government to provide farmers with field management, processing technology and training support. Yunnan Coffee Factory, established in 1992 as a coffee cooperation project between the Chinese government and the United Nations Development Programme (UNDP), was the largest and most complete professional producer of roasted coffee in China at that time. Subsequently, more multinational groups, including Maxwell and Starbucks, also entered Yunnan one after another.

At present, coffee has been planted in 35 counties in 9 prefectures, including Pu'er City, Baoshan City, Dehong Prefecture, Lincang City, Wenshan Prefecture and Xishuangbanna. As of the beginning of last year, the coffee planting area in China exceeded 1.8 million mu, while the coffee planting area in Yunnan reached 1.77 million mu, accounting for more than 98% of the country's total.

It is no exaggeration to say that Chinese coffee looks at Yunnan.

Agricultural products Futures in China

At present, there are only four legal commodity futures exchanges on Chinese mainland, including Zhengzhou Commodity Exchange, Shanghai Futures Exchange and Dalian Commodity Exchange. At present, there are 18 futures varieties of agricultural products listed in 3 companies.

Zhengshang listed futures include common wheat, high-quality strong gluten wheat, early indica rice, late indica rice, japonica rice, cotton, rapeseed, rapeseed oil, rapeseed meal, sugar and other crop products, as well as thermal coal, methanol and other industrial products. At present, Zheng Shangsuo is the futures exchange with the largest variety of agricultural products futures trading in China.

Zhengzhou Commodity Exchange, founded on October 12, 1990, is the first futures market pilot unit approved by the State Council in China, which is vertically managed by the China Securities Regulatory Commission.

At present, Zhengshang wheat and cotton futures have been incorporated into the global quotation system, playing an active role in finding future prices and hedging. "Zhengzhou price" has become an important indicator of global wheat and cotton prices.

In addition, Dalian Commodity Exchange also has futures trading of agricultural products such as corn, corn starch, yellow soybean No. 1, yellow soybean No. 2, soybean meal, soybean oil, palm oil and eggs, and the Shanghai Futures Exchange also has a futures variety of agricultural products, that is, natural rubber.

In this meeting with Zheng Shangsuo, Qi Li, deputy director of Yunnan Securities Supervision Bureau, said that coffee cultivation in Yunnan is mainly concentrated in poor counties in Yunnan, which has become one of the important sources of income for local farmers. Listed coffee futures will help farmers guard against the risks caused by price fluctuations, ensure stable income, and play an important role in "accurate poverty alleviation and accurate poverty alleviation". Hope that Zheng Shang can speed up the progress of research and development and launch coffee futures as soon as possible.

Qin Quanjin, deputy general manager of Zheng Shangsuo, said that Zheng Shangsuo will conscientiously do a good job in market research, conduct research in conjunction with relevant institutions, speed up the process of research and development, design a coffee futures contract system that meets the needs of the industry, and promote the stable income of farmers. Help Yunnan poverty alleviation work, and better promote the futures market to serve the real economy.

In addition, according to the Shanghai Securities News, Zheng Shangsuo and the Futures Department of the CSRC also went to Urumqi, Korla, Aksu, and other places in Xinjiang at the beginning of this year to conduct on-the-spot research on the necessity and feasibility of futures trading of locally advantageous agricultural products such as red dates, ketchup, and fragrant pears. Among them, red jujube is the most feasible to become a new variety of futures.

Yunnan International Coffee Exchange Center

In order to strengthen the advantageous industry of coffee, Yunnan has made great efforts to promote spot trading of coffee.

In October 2014, yce Yunnan Coffee Trading Center was established in Pu'er. Industrial and commercial data show that when the company was established, there are 5 shareholders in Yunnan Jinyuan Flower Industry Co., Ltd., Kunming International Flower auction and Trading Center Co., Ltd., Yunnan Jinyuan Equity Investment Fund Management Co., Ltd., Pu'er City Investment Industry Co., Ltd., and Yunnan Aili Agriculture and Animal Husbandry (Group) Co., Ltd.

In October of the same year, Kunming Coffee Trading Center (chip), jointly sponsored by Yunnan Coffee Industry Association, Yunnan Fine Coffee Association and Yuntianhua Yunnan Phosphate Group, was listed in Kunming with the participation of more than 30 coffee enterprises in the province. Xiong Xiangren, president of Yunnan Coffee Industry Association, is the founder of Dehong Hougu Coffee.

However, the Kunming Coffee Trading Center has not been approved by the relevant departments so far, Xiong Xiangren can only move to Chongqing. In June last year, Yunnan Dehong Hongtian Industrial (Group) Co., Ltd., the controlling shareholder of Dehong Hougu Coffee, and Chongqing Energy Investment Group Co., Ltd. jointly launched the establishment of Chongqing Coffee Trading Center. Hope to create China's largest coffee electronic trading platform, coffee (cross-border) e-commerce platform and coffee industry chain financing trust platform. Among them, the former directly holds 41% of the shares, making it the largest shareholder.

"the biggest problem with Yunnan coffee is the lack of unity, the market is so big, but also a mess." After nearly two years of preparation, Shu Yang, general manager of yce Yunnan Coffee Trading Center, expressed such feelings in an interview with reporters in June last year.

On December 29th last year, three shareholders of Yunnan Land Reclamation Group, Hong Kong Xinhua Group and Yunnan Hougu Coffee Co., Ltd. joined, upgrading yce Yunnan Coffee Trading Center to Yunnan International Coffee Trading Center, trying to promote Yunnan to become an important international coffee trading platform.

However, both Yunnan International Coffee Trading Center and Chongqing Coffee Trading Center can only carry out spot trading, but not coffee futures trading.

Futures eliminate spot?

Coffee beans are the second largest commodity in global trade after crude oil, so futures trading is the most important way of trading. Among them, coffee futures in New York and London have basically monopolized the global coffee futures market.

Since 1988, the purchase price of coffee in Yunnan has also basically referred to the international futures price, with the coffee futures price of the New York Mercantile Exchange (now incorporated into the ICE Intercontinental Exchange) minus a small amount of transportation costs. If Zhengshang coffee futures are launched, the purchase price of Yunnan coffee will probably refer to this price.

However, the global coffee planting area has reached 1.8 billion mu, with an annual output of nearly 10 million tons, while annual consumption has reached more than 8 million tons, while Yunnan accounts for only 1% of the global coffee production, and China accounts for only 2.25% of the global consumption. Compared with the major consumer countries in Europe and the United States, it will certainly take a long time for Chinese coffee futures to grab the pricing power.

But it is obvious that once Zheng Shangsuo launches coffee futures, it will certainly have an impact on Yunnan International Coffee Trading Center and Chongqing Coffee Trading Center. After all, futures trading with financial attributes is more likely to attract capital investment than spot trading.

The realistic choice of Yunnan coffee giant should be to abandon the illusion of spot trading and actively embrace futures trading.

However, according to public information, in the discussion between Zheng Shangsuo and Yunnan Securities Regulatory Bureau, Yunnan Land Reclamation Group, as the main body of Yunnan International Coffee Trading Center, did not appear, while Yunnan Yunnan Biology Company, which is owned by Yunnan Capital, participated in the talks. According to this prediction, Yunnan Capital may play a more important role in Yunnan coffee futures trading in the future.