Yunnan Coffee: how to control the price say?

Since March this year, coffee bean prices in Yunnan have continued to decline, coffee beans in some states have been unsalable, and coffee farmers are worried about coffee bean prices, aiming at the fact that coffee bean prices have dropped to the lowest level in three years. The reporter recently investigated and interviewed the overall situation of the coffee industry in Yunnan.

Prices fell to their lowest level in three years

With the temperature approaching 30 °C in Pu'er, Yunnan Province in April, Wang Fan's mood is as hot as the weather. The price of coffee beans has been falling since the beginning of this year, from 31 yuan per kilogram to about 20 yuan per kilogram.

"Last year, coffee beans per mu of land could be sold for 4,500 to 5,000 yuan, but only about 3000 yuan this year, which is in a state of capital preservation, contrary to the situation that was low before last year and then high. This year's price has dropped from 30 yuan per kilogram at the beginning of the year to about 20 yuan now." Wang Fan said.

According to the results of a survey conducted by the Yunnan Coffee Association, at present, the planting area of coffee in Yunnan has reached more than 800,000 mu, with an area of 670000 mu. This year's total output is about 60, 000 tons, nearly 10, 000 tons more than last year, and the output is higher. But the price has dropped by 1/3 this year.

What is the reason why the price of coffee beans continues to decline? Xiong Xiangru, president of the Yunnan Coffee Industry Association, said: "the European debt crisis, the US subprime crisis and the financial crisis that spread to the world affected the market. Middlemen began to wait and see, and coffee manufacturers began to start inventory. It is this wait-and-see attitude and coffee manufacturers starting inventory that led to a drop in prices."

Three major reasons lead to the relative surplus of the market.

The coffee industry in Yunnan began to produce on a large scale in the 1950s, and it has gone through a course of 60 years, especially after the 1980s, Yunnan coffee has embarked on the road of marketization. When the market is good, the planting area of Yunnan coffee expands. When the price is not good, farmers cut down coffee trees and plant other crops. After decades of repetition, although the coffee industry in Yunnan has begun to take shape, the total output is less than 1% of the world. The price of coffee beans is still greatly influenced by the US futures market.

According to Xia Bin, director of Yunnan Biological Industry Office, the current unsalable and excess coffee market in Yunnan are relative, mainly caused by three aspects: first, the psychological expectation of farmers. Last year, the price of coffee beans was first low and then high, and the price soared all the way up to 41 yuan per kilogram, the highest in years. At the beginning of this year, coffee beans were 30 yuan per kilogram. Farmers' habitual thinking that they could rise later. Lead to the current excess storage. Second, the quality of coffee beans is not guaranteed, coffee farmers pick prematurely, coffee beans are not yet mature, storage conditions are not up to standard, and other reasons lead to poor quality of coffee beans, coupled with this year's market situation, there are difficulties in selling products; third, the strength of local enterprises is not enough. At present, the industrial chain of coffee enterprises in Yunnan is not long, deep processing efforts are not enough, mainly rely on the export of raw materials, prices are bound to be controlled by others.

Xiong Xiangru said: "the shrinking coffee consumption market is a temporary illusion, in fact, coffee consumption has not decreased."

According to the survey of Yunnan Coffee Association, the current production cost of Yunnan coffee beans is 1315 yuan per kilogram. When the purchase price is more than 15 yuan, coffee growers still have a certain profit margin.

Strive to establish a futures market in 3 ~ 5 years

After 60 years of large-scale production, the coffee industry in Yunnan has always been in the cycle of price ups and downs, and the price initiative is controlled by the American futures market.

How can we fundamentally avoid such reincarnation and grasp the initiative of price?

In 2008, Yunnan people began their action to "save" the coffee industry: Yunnan coffee began to be deeply processed, Dehong's Hougu Company built the country's largest instant coffee production line, and Aiyi Group built the largest roasted coffee production line in China. The development of coffee enterprises in Yunnan is to resist certain risks when prices fall. This year, the planting area of coffee in Yunnan will exceed 1 million mu. When Yunnan is vigorously developing the coffee industry, the price of international coffee beans suddenly plummets.

Since February this year, the continuous decline in the price of coffee beans in Yunnan has swept through Yunnan, coffee growers panicked and some coffee beans are unsalable.

On March 31, international coffee giants stopped buying coffee beans in Yunnan. The unsalable coffee beans and falling prices in Yunnan became a topic of concern for a while.

A few days ago, the member units of the Yunnan Coffee Association formally issued an initiative, including Hougu Company, promising not to let coffee beans rot in the hands of farmers.

Xiong Xiangru, chairman of Hougu Company, said: "under the condition of ensuring that prices are not depressed, even if losses are lost, local enterprises in Yunnan must buy coffee beans in the hands of farmers!"

Xiong Xiangru said that it will take three to five years to establish the world's third largest coffee bean futures market in China, when Yunnan coffee bean prices will be in the hands of their own people and will no longer be subject to the US futures market.

People in the coffee industry believe that in order to resist the harm caused by falling prices and unmarketable coffee beans, 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.

(responsible Editor: Leo)