Yunnan Coffee Farmers Endure Low Prices in Pu'er

In late November, the air in Pu’er, Yunnan carries no chill—but for coffee farmer Wang Zhongxue, the season brings anxiety. In his yard, he sun-dries depulped coffee cherries, watching global futures fall below his cost of production. Like many in his village of Dakaihe, Wang faces another price slump, but he’s not giving up.

The current international coffee futures price sits at just 107 US cents per pound—about 14.3 yuan per kilogram. That’s slightly under Yunnan farmers’ cost of around 14.67 yuan/kg. Yet veteran growers like Wang remain determined.

A History of Resilience

This isn’t the first price crash Wang has weathered. The 74-year-old recalls the frost disaster of 1999, which slashed prices to around 6 yuan/kg. Many farmers abandoned coffee for other crops—but Wang held on. By 2003, global prices rebounded, launching a golden decade for Yunnan’s coffee sector.

His neighbour Zhang Kui also started in 1998, enduring the 1999 crisis before prospering during the following price boom. Today, Zhang lives in Dakaihe’s tallest “villa,” built after years of success, and employs ten workers. Chen Jiahua, another 1998 starter, nearly quit too—but stuck it out, and now coffee is his family’s main income.

Support Systems Behind the Farmers

“Yunnan’s coffee industry began scaling up in the late 1980s and early 1990s,” says Dong Zhihua, Vice President of the Yunnan Coffee Industry Association. A major turning point came in 1988, when Nestlé entered China and, with government help, promoted smallholder Typica coffee farming in Yunnan.

Nestlé launched an agricultural technical assistance program in 1992, opened a 60-hectare trial farm in 1997, and has maintained agronomists in Pu’er ever since. In 2011, they distributed free copies of the China Coffee Planting Manual, and in 2012 began training local farmers. Their Pu’er buying station increased annual purchases from 8,000 to 10,500 tonnes—all supplied to Nestlé factories.

The three featured farmers all benefited from Nestlé’s programme. Chen Jiahua, who began supplying Nestlé in 2000, attended eight training sessions. “The techniques were very useful,” he says. Zhang Kui adds, “They became my friends.”

Government and Corporate Interventions

To counter low prices, the Yunnan provincial government has allocated over 10 million yuan for coffee estate development in key regions. The Pu’er municipal government has contributed more than 10 million yuan to support storage fees, loan interest subsidies, and international marketing efforts.

Nestlé has also expanded its investment. Beyond the “Nestlé Coffee Center” initiative—which offers training and infrastructure—it opened a new factory in Pu’er with 880 million yuan in investment, aiming to meet rising demand in the Chinese market.

Farmers’ Hopes for the Future

Wang Zhongxue plans to expand his planting area next year to boost yield. “I hope coffee prices rise soon,” he says. Despite the hardship, he remains optimistic. “I believe that as long as we persist, we will win.”

Zhang Kui and Chen Jiahua echo that resilience. They’ve seen cycles before—and survived. The current low period may be tough, but these farmers have weathered worse.

Frequently Asked Questions

What is happening to coffee prices in Yunnan right now?

As of November 2023, the international coffee futures price is 107 US cents per pound, roughly 14.3 yuan per kilogram—slightly below Yunnan farmers’ production cost of about 14.67 yuan/kg.

How have Yunnan coffee farmers responded to low prices in the past?

Many farmers, including Wang Zhongxue and Zhang Kui, endured the 1999 price crash caused by frost and held on. Prices recovered by 2003, leading to a prosperous decade for those who stayed in the industry.

What support do Yunnan coffee farmers receive?

Farmers benefit from training and technical support by Nestlé, including free manuals and workshops. The Yunnan provincial and Pu’er municipal governments also provide funding for coffee estate development, storage, loans, and marketing.

Which companies are involved in supporting Yunnan’s coffee industry?

Nestlé has been a major player since 1988, offering agronomy support, training, and purchasing agreements. The Yunnan government has also invested significantly in infrastructure and promotional efforts.

Are Yunnan coffee farmers likely to switch crops due to low prices?

Many, like Wang Zhongxue, resist switching. They cite past experience that switching crops during price dips often leads to missed recoveries, and they prefer to persist with coffee.

What are the farmers’ plans for the future?

Wang Zhongxue intends to expand planting to increase yield. Others hope for price recovery while continuing to produce coffee, confident that the market will improve over time.

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