Yunnan Coffee acquisition increases 86% Coffee chain Store may raise prices

Coffee-loving white-collar workers may be prepared to increase consumer spending in this area. Global coffee bean prices have soared as Brazil, the world's largest coffee producer, has suffered its worst drought in decades and record high temperatures. The ICE Arabica coffee futures market hit a two-year high on Tuesday, while Robusta coffee prices rose to an one-year high, according to data. Industry insiders told reporters that the high price of coffee raw materials will be transmitted to the downstream market, which is expected to be reflected in two or three months.

The purchase price of coffee in Yunnan has increased by 86%.

Coffee prices have soared more than 80% this year since the start of March, affected by lower expectations for the Brazilian coffee harvest, according to ICE data.

Changes in prices in the international market have affected the domestic market. Starbucks told reporters on March 12 that the company uses Yunnan coffee, but it has clearly felt the sharp rise in the price of coffee raw materials in the past three months. At the end of last year, the purchase price of coffee raw materials in Yunnan was only about 14 yuan / kg, but now the purchase price has risen to nearly 26 yuan / kg, an increase of 86%.

A relevant official of Aiyi Coffee said that the price of coffee raw materials in Yunnan precisely follows the international coffee bean futures prices, which shows that the rise in global coffee raw material prices has had a direct impact on domestic coffee manufacturers. However, Aixing Coffee also said that as the company is still promoting its own brand this year, in order to promote it, it will not raise the price of coffee because of the rising price of raw materials for the time being.

Hu Lu, deputy secretary general of the Yunnan Coffee Industry Association, also told the media that the purchase price of coffee beans has continued to rise since February this year, rising to 22 yuan / kg and to 25-35 yuan / kg in early May.

Coffee chains may be forced to raise prices

In fact, with the rise in the price of Brazilian beans, which account for 40 per cent of global coffee production, it will have an impact on the downstream market, and coffee prices have already risen in Australia. According to some merchants, prices can be expected to rise by 5% and 15%. "We will try our best to absorb the extra cost, but reasonably speaking, the increase in the wholesale price of coffee is inevitable."

Local industry insiders also told reporters that since Brazil is one of the largest producers of coffee raw materials in the world, and the sharp reduction in coffee bean production in Brazil due to drought will also have a year-round impact, it is impossible to change the current situation that the supply of coffee raw materials falls short of demand in the short term, so it is expected that the price of coffee raw materials will only rise in the next few months, and it is more likely to rise to 35 yuan / kg. At that time, many coffee shops at the terminal will be affected by this and will have to raise their prices.

Tang Jinqing, vice president of the Guangzhou Coffee Industry Association, told reporters, "this wave of price increases will soon be reflected downstream, about two or three months, and Brazilian coffee beans are more popular varieties, not boutique coffee, so it will affect a certain range." But some industry insiders, who spoke on condition of anonymity, said, "consumers are very sensitive to prices and will consider price increases only if they judge that this wave of price increases is a long-term trend and that it is difficult to return to the original price chain."

On March 12, the reporter called Starbucks China on the news of the rise in global coffee raw materials, and the relevant person in charge of the company said that as the company had to consult the company's headquarters about the raw materials, it was necessary to submit the interview outline to the headquarters before responding. It is impossible to confirm whether the company's raw material prices have been affected, nor can it predict whether Starbucks coffee prices will be affected by this in the near future. McDonald's said, "so far there has been no notice of an increase in the price of coffee." As far as the reporter knows, including Pacific Coffee and COSTA Coffee, Brazilian coffee beans are not used as raw materials.