Ten billion orders! Luckin Coffee signs Brazilian coffee bean purchase agreement

Recently, during the G20 summit in Brazil, Luckin Coffee and the Brazilian Agency for the Promotion of Export and Investment (ApexBrasil) signed a "Memorandum of Cooperation" in Brasilia, the capital of Brazil. According to the agreement, Luckin Coffee will purchase an additional 120000 tons of Brazilian coffee beans on the basis of a two-year contract signed in June this year.

That is, in the five years from 2025 to 2029, Luckin Coffee will purchase a total of 240000 tons of coffee beans from Brazil, worth 10 billion yuan, which is Luckin Coffee's largest coffee bean purchase plan to date.

In addition, given the current high international coffee prices, Brazilian coffee producers are taking advantage of high coffee prices to accelerate coffee sales, according to a report by consulting firm Safras. Brazil now sells 70 per cent of this year's coffee production, up from 64 per cent in the same period last year and an average of 67 per cent over the past five years.

As a result, the Brazilian Association of exporters (Cecafe) reported earlier that coffee sales in October were above average, reaching a price of about US $282.8 per bag of coffee, and even at such a high price, Brazil still set an all-time high of 4.926 million bags of coffee (60 kg / bag) in October.

It is all because local coffee growers say that the recent need for funds to purchase fertilizers and pay employees' wages has stimulated the progress of sales. At present, the progress of Arabica coffee sales is 67%, and that of Robusta coffee is 76%.

In addition, according to the Safras report, Brazil has pre-sold about 11 per cent of its coffee production in 2025, with 16 per cent of Arabica coffee being pre-sold, down from 25 per cent in the same period last year. Due to the recent rise in international futures prices, the strengthening of the US dollar, the depreciation of the Brazilian real and concerns about a decline in coffee production in Brazil in the future, coffee raw bean manufacturers have adopted a more cautious attitude and slowed down future coffee sales.

Brazil has been affected by bad weather this year, resulting in unstable coffee production in the next season. Earlier, Brazil suffered the worst drought in recent years and suffered the threat of fire caused by drought, which reduced coffee production in the new season and damaged the planting and production potential of coffee in the new season of 2025x26.

Although recently, Brazil began to restore rainfall, although rainfall can restore moisture to dry soil and ease the pressure on coffee trees, it is not enough to make up for the damage caused by drought and fire. Moreover, the rain is gradually increasing. Brazil's National Meteorological Institute recently issued an orange warning for heavy rainfall. Parts of 12 states in central Brazil will be affected, with rainfall of up to 100 millimeters in some areas within 24 hours, accompanied by strong winds of up to 100 kilometers per hour.

The bad weather is not conducive to the growth of Brazilian coffee trees, and several agencies have cut coffee production in the new season, including the United States Department of Agriculture (USDA). According to the latest data released by the United States Department of Agriculture (USDA), Brazil produced about 66.4 million bags of coffee in 2024Coffee 25, down from the old figure of 6990. In addition, the inventory of Brazil 2024 Compact 25 at the end of the year was estimated at 1.2 million bags, a decrease of 26 per cent compared to the previous year.

Although Luckin Coffee signed a tens of billions of yuan memorandum on the purchase of coffee beans with Brazil, which has provided a lot of help to the Brazilian coffee industry, at present, Brazil is still affected by bad weather, and the output in the future production season is still uncertain. The uncertainty of Brazilian production also continues to push up international coffee futures prices.

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