Yunnan Coffee Prices Collapse as Nestlé Pauses Buying

In Yunnan’s Pu’er region, coffee growers are staring at mounting losses as prices plunge and buyers vanish. This year, the once-booming crop is stacking up unsold—some farmers have over 800 tons in storage, and the village of Dakaihe alone holds 870 tons. Once a reliable buyer, Nestlé has stopped taking new deliveries, leaving farmers scrambling.

The short answer: Yunnan coffee prices have dropped nearly 50% from their 2021 peak of 41 RMB/kg to just 22 RMB/kg. Nestlé has filled all four of its warehouses (holding 1,200 tons) and won’t buy again until space opens. Over 8,000 tons remain unsold with farmers.

Why Yunnan Coffee Prices Have Crashed

In early 2021, arabica coffee futures on the New York Exchange hit highs above 41 RMB per kilogram. By 2024, those prices have nearly halved to around 22 RMB/kg. That steep drop has slashed farmer incomes. One grower, Shi Youfu from Dakaihe village, harvested about 60 tons of fresh cherries this season but sold only 3 tons of processed beans—down from 10+ tons the previous year. His revenue fell by roughly 100,000 RMB, with farm-gate prices dropping over 10,000 RMB per ton compared to 2021.

Nestlé Stops Buying: 'Warehouses Are Full'

Nestlé, the largest buyer of Yunnan coffee and the most recognized coffee brand in China, has abruptly paused new purchases. According to Li Sunqiang, a procurement staffer, “We’re not taking external deliveries right now. Only pre-scheduled orders placed before March 30 will be honoured.” The company’s four warehouses in Pu’er are fully stocked—at least one holds 1,200 tons—with beans moving out at just 80 tons per day. That means it could take three weeks just to clear existing stock. A Beijing-based Nestlé spokesperson confirmed the company has already bought 9,000 tons this season, meeting its annual plan. “Our procurement volume is stable year to year. We don’t promise increases or adjustments,” said Dong Yuguo, VP of Group Affairs for Greater China. Nestlé sources much of its Yunnan coffee for domestic roasting, not export.

Export-Grade Coffee Sells for Less—And Farmers Hold Back

While some farmers can sell to local processors at 18–19 RMB/kg, Nestlé’s price was 22.5 RMB/kg. For export-bound beans, the difference is even starker: just 2–3 RMB less per kilo, but enough to make farmers wait. “If we sell to other local buyers, the price is much lower—a couple of RMB less per jin. That’s a lot for us,” said Yao Hongqing of Pu’er Longxin Coffee Factory. According to the Pu’er Coffee Office, around 8,000 tons of coffee beans are still being held by farmers, who hope for better prices—or at least a return to break-even levels.

What Happens Next?

With global prices low, Nestlé’s buying paused, and farmers unwilling to sell at a loss, the Yunnan coffee market is effectively frozen. Village officials like Hua Honglin are fielding hundreds of desperate calls daily from growers unsure what to do next. “People are really anxious,” Hua said. “I was getting over 400 calls a day.” For now, the beans sit. Some farmers have resorted to wearing suits and cold-calling buyers, hoping for a better deal—but with global arabica prices still depressed and local demand limited, there’s little relief in sight.

Frequently Asked Questions

Why have Yunnan coffee prices dropped so much?

Yunnan coffee prices have fallen from a peak of around 41 RMB per kilogram in May 2021 to approximately 22 RMB/kg in 2024—a drop of nearly 50%. This is due to a global decline in arabica coffee futures and oversupply in the market.

Has Nestlé stopped buying all Yunnan coffee?

Nestlé has not completely stopped buying but has paused new purchases because its warehouses are full. The company has four warehouses in Pu’er, one of which holds 1,200 tons, and will only accept beans that were pre-scheduled for delivery before March 30. It won’t resume broader buying until space becomes available.

How much coffee is unsold in Yunnan right now?

Across Yunnan, an estimated 8,000 tons of coffee beans remain unsold with farmers. In just one village, Dakaihe, growers are holding onto 870 tons, with one farmer alone storing 7 tons and another village household holding up to 800 tons.

Why are farmers holding onto their coffee instead of selling?

Many farmers are waiting for prices to improve. Export-grade coffee fetches only 2–3 RMB less per kilogram than domestic sales, and some hope for a return to the 2021 price levels near 41 RMB/kg. With a difference of just a few RMB, they prefer to store beans rather than sell at a significant loss.

What is the role of Nestlé in the Yunnan coffee market?

Nestlé is the largest buyer of Yunnan coffee and the most well-known coffee brand in China. It primarily sources Yunnan beans for domestic production, not export. This season, it purchased 9,000 tons, meeting its planned quota, and has temporarily stopped accepting new beans due to full storage facilities.

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