Yunnan coffee has hidden worries under its reputation

Kunming, China Economic News: (reporter Li Qiang) Last year, the Yunnan provincial government issued the "Ten-year Plan for the Development of Yunnan Coffee Industry (2010-2020)". The planting area of coffee in Yunnan will reach 1 million mu in 2015 and 1.5 million mu in 2020. The government and the industry are optimistic about the prospect of Yunnan coffee industry. However, since March this year, the price of coffee in Yunnan has continued to decline, and the difficulty in selling coffee in some states has attracted media attention. Price fluctuation is only a normal market behavior, why does it have such a big reaction to the accelerated development of Yunnan coffee industry? People began to reflect on what hidden worries still exist under the reputation of Yunnan coffee? To this end, a reporter from the China Economic Times conducted a relevant interview.

It is understood that Yunnan coffee industry began to produce on a large scale in the 1950s and has gone through more than 60 years of mileage. In this process, it has experienced too many ups and downs, especially after the 1980s. Yunnan coffee industry embarked on the road of marketization, when the market was good, Yunnan coffee planting area expanded, when the price was not good, coffee farmers cut down coffee to grow other crops, coupled with natural disasters and other factors. Yunnan coffee industry has always been in the cycle of "hope begins, disappointment ends". After decades of repetition, a group of Yunnan coffee people who have been working hard in Yunnan coffee industry unswervingly adhere to the dream of making Yunnan coffee industry bigger and stronger.

"this time, the decline in coffee prices in Yunnan is a normal market performance, not because the coffee beans in the hands of farmers can not be sold, but because farmers have higher expectations for prices." Hu Lu, deputy secretary general of Yunnan Coffee Industry Association, said in an interview with reporters that in the 2010-2011 quarter, the delivery price of Yunnan coffee beans in Kunming rose from 23 yuan per kilogram to 41 yuan per kilogram. The price for the 2011-2012 season starts from 31 yuan per kilogram and currently hovers around 20 yuan per kilogram. Because there was a good price last year, farmers have psychological expectations of the price, have been holding a wait-and-see attitude, and are not in a hurry to sell, it is not that they cannot sell, it is just a question of price.

The Yunnan Coffee Industry Association issued a call: Yunnan local coffee enterprises take joint action to purchase more than 20,000 tons of coffee beans that are currently difficult to sell, and never let a ton of coffee beans rot in the hands of curry farmers, so as to ensure the healthy development of Yunnan coffee industry. do not hurt the enthusiasm of coffee growers.

To this end, the Yunnan Coffee Industry Association has taken active action and sent people to visit the main coffee producing areas in Yunnan many times to conduct on-the-spot research on the current declining coffee prices in Yunnan and the difficult selling of coffee beans.

Prices continue to fall and farmers are worried.

The output of coffee beans in Yunnan reached 50, 000 tons last year and about 60, 000 tons this year. Although production has increased this year, prices have fallen by 1/3. It is understood that at present, more than 20,000 tons of coffee beans from major coffee producing areas such as Pu'er, Baoshan and Banna are difficult to sell.

What is the reason why the price of coffee continues to decline and it is difficult to sell? Xiong Xiangjin, president of Yunnan Coffee Industry Association, analyzed that the European debt crisis, the US subprime crisis and the financial crisis that spread to the world affected the coffee market. Middlemen began to wait and see, and coffee manufacturers began to start inventory, giving people the wrong impression for a moment. It seems that coffee production is overproduced and the coffee consumption market is shrinking. In fact, coffee consumption has not decreased. But it is this wait-and-see attitude and the opening of inventory by coffee manufacturers that lead to a decline in prices.

In addition, through observation in recent decades, there is a price cycle in world coffee prices, with a band every decade or so. Coffee prices began to rise gradually in 2003. In 2011, global coffee prices rose to their highest level in nearly 30 years, and coffee prices fell back in 2012. However, this price drop is too fast to catch coffee growers off guard, and we do not know when prices will rebound in the future. Coffee growers are inevitably disappointed when they measure this year's income at last year's prices. According to Hu Lu, deputy secretary general of Yunnan Coffee Industry Association, "in the past 30 years, the purchase price of coffee in Yunnan has been as low as 78 cents, equivalent to about 8 yuan, and the highest price is about 41 yuan."

According to the survey, the current production cost of coffee cultivation in Yunnan is 1315 yuan per kilogram. When the purchase price is more than 15 yuan, coffee growers still have a certain profit margin, but compared with investing in other planting industries, the rate of return is very low.

How can we fundamentally avoid such reincarnation? in 2008, the planting area of coffee in Yunnan Province reached 390000 mu, coffee output was nearly 30, 000 tons, and coffee prices became stable. A group of Yunnan coffee veterans with more than 20 years of coffee industry experience began their action to "save" Yunnan coffee industry: Yunnan coffee factory began intensive processing. Hougu Coffee has built the largest instant coffee production line in China. Aichi Coffee has built the largest roasted coffee production line in China. Their action is to avoid certain risks when coffee prices continue to fall again. In January 2012, the planting area of coffee in Yunnan Province reached 860000 mu. According to the planting plans of the major coffee producing areas in Yunnan, the planting area of coffee in Yunnan will exceed 1 million mu in 2012. When the development of Yunnan coffee industry is in full swing, international coffee prices suddenly plummeted!

Since February 2012, the continuous decline in coffee prices in Yunnan has swept Yunnan. Coffee growers have panicked and some coffee beans are difficult to sell.

On March 31, 2012, international coffee giants stopped buying Yunnan coffee beans. Yunnan coffee is difficult to sell and its price continues to decline. At this time, Hougu Coffee Company, as the chairman of the association, is busy, and the vice-chairman units are also responding positively, looking for ways to find more sales breakthroughs and fulfilling their promise not to let a ton of coffee beans rot in the hands of farmers. In the case of ensuring that the price is not reduced, even if the loss, Yunnan local coffee enterprises must buy coffee beans in the hands of coffee farmers!

According to the raw material demand of the company's 13000 tons of instant coffee production line, Hougu Coffee Company has abandoned the import of cheap coffee beans from abroad and left all the 16000 tons of raw material acquisition plan to Yunnan coffee growers. Aigu Coffee Company's purchase site, every day, there are many vehicles full of coffee beans waiting to be acquired. When more local coffee companies in Yunnan work harder, all the Yunnan coffee beans that are difficult to sell at present are expected to be sold.

Where is the way out for Yunnan Coffee Industry?

When the local coffee enterprises in Yunnan take active action to ensure that Yunnan coffee growers sweat and do not shed tears, what measures will our government departments take?

Some netizens appeal that coffee purchase prices are unpredictable, and when government departments can come forward to formulate and issue a series of principles and policies conducive to stabilizing the coffee market and price regulation, so as to return the vast number of farmers to a sustainable and stable market.

In the view of some local coffee enterprises in Yunnan, the government has a way to "rescue the market": for example, when the price of coffee continues to decline, the government coordinates, supports enterprises to purchase and preserve it, and sells it again when the price of coffee goes up. Ensure the enthusiasm of coffee cultivation At the same time, when coffee prices continued to decline, the relevant government departments responded very quickly, arranging discount loans to local coffee enterprises and encouraging enterprises to actively buy coffee so as not to let coffee rot in the hands of farmers.

Through the reaction of all parties in the process of price fluctuation, Yunnan Coffee Industry Association deeply realized that to build a standardization system, it is necessary to establish standardization in all aspects of production, planting, harvest and so on. Farmers also need to strengthen the popularization and guidance of market-related knowledge. What is more important is to extend the industrial chain, improve the added value, establish Yunnan coffee brand and so on.

Accordingly, people in the coffee industry believe that in order to resist the harm caused by the continuous decline in prices and the difficulty of selling coffee, Yunnan coffee must take the road of intensive processing and brand marketing, enhance the added value of Yunnan coffee, and extend the coffee industry chain. At the same time, it is necessary for various government departments to carry out a series of optimization in the use of financial means and the popularization and implementation of agricultural insurance, to strengthen the support for the development funds and policies of various agricultural industries, and to create better and better conditions for farmers to increase their income and become rich.

China Coffee Trading Network: www.gafei.com