Why is Yunnan Coffee Selling Low? Yunnan coffee prices are falling?

Dehong Hougu Coffee Co., Ltd., Yunnan's largest coffee company, announced to the outside world that it will be the first to make a harvest offer, that is, it will be converted into RMB according to the futures price of coffee in New York, minus the transportation expenses. buy Yunnan coffee at a price of no less than 15000 yuan per ton, so that Yunnan coffee is no longer sold cheaply.

Over the past 27 years, Yunnan Ka Nong has lost at least 3.4 billion yuan

Yunnan coffee acreage and output account for about 99% of China's coffee. At present, Yunnan has formed three major coffee producing areas of Pu'er, Baoshan and Dehong, with a coffee planting area of more than 1.8 million mu. According to the data provided by the Yunnan Coffee Industry Association, Yunnan coffee production is expected to reach about 130000 tons this year.

"however, under the influence of the recent decline in futures prices in New York, Yunnan coffee will face the situation of increasing production without increasing income." Xiong Xiangren, chairman of Hougu Coffee Company, said.

Why did this happen? A reporter from China Youth Daily learned in an interview that Yunnan coffee exports account for about 80% of China's coffee exports. However, unlike other major coffee producers, foreign-funded enterprises, local enterprises and traders can buy coffee directly from farmers in Yunnan. International coffee giants such as Nestl é and Starbucks are the largest local buyers of coffee beans. According to officials from the Pu'er Tea and Coffee Industry Bureau, Nestl é purchased about 10, 000 tons of coffee in Pu'er last year and Starbucks about 8000 tons.

And these coffee giants set the coffee purchase price in Yunnan according to the daily changes in international coffee futures prices, that is to say, Yunnan coffee beans are supplied to multinational corporations in the form of unclassified unified goods, and their prices are subject to the prices of international coffee futures.

"since foreign coffee companies entered Yunnan in 1988, there has been an acquisition practice, that is, the purchase price is generally subtracted from the New York futures price by 10-20 cents." Xiong Xiangren said that the cost for farmers to grow a jin of coffee is 13 yuan to 14 yuan, while the cost for the company is 17 yuan to 18 yuan. However, the quotation system of foreign-funded coffee enterprises can not protect the interests of farmers. This quotation system has been maintained in Yunnan for 27 years. Based on the average annual output of 60, 000 tons, Yunnan Ka Nong has lost at least 3.4 billion yuan in the past 27 years.

Does the direct purchase of enterprises harm the interests of farmers?

Li Gongqin, secretary general of the Yunnan Coffee Industry Association, said: "Yunnan has almost become the only coffee producing area in the world where foreign businessmen can buy coffee beans directly and cheaply from farmers, and for many years they can buy coffee beans at a price lower than the international coffee futures price."

He pointed out that in all coffee producing areas in the world, there is direct government control, especially in large coffee producing countries, the government absolutely does not allow foreign businessmen to purchase domestic coffee directly.

Colombia, the main coffee producing country, has specially established the National Coffee producers' Association, whose exports are managed by the Association, whose quotation is basically higher than the New York futures price of 40,050 cents / lb; when the price of coffee falls, the association will use a large amount of money to buy coffee beans at a protective price, so as to ensure that coffee growers will not lose money, so as to stabilize the coffee industry base.

Brazil adopts an auction-style protection mechanism, which is uniformly purchased by the government. Foreign-funded enterprises are not allowed to purchase coffee beans directly from farmers according to the New York futures price.

Africa is an auction type, you must hold an auction license to participate in the auction, in order to be qualified to buy coffee.

Vietnam, on the other hand, is designated by the government to buy several coffee companies with the qualification to buy its own coffee, which is generally higher than the price offered by the London Futures Exchange of US $70,100 per tonne.

Coffee is an important source of economy in Costa Rica, where 1 / 3 of the population is engaged in coffee-related industries. Its farmers only grow coffee and provide fresh fruit, and their sales are monitored by the Costa Rican National Coffee Center. 75.8% of the proceeds go to farmers, who live a rich life.

"if low prices hurt farmers, farmers will destroy coffee trees. In the end, it is the farmers who suffer. " Xiong Xiangren said that Hougu Coffee was the first to quote. According to this calculation, Hougu Coffee will increase its harvest price per ton of Yunnan coffee by about 1500 yuan in this harvest season, and enterprises will pay hundreds of millions more yuan, which will directly benefit Yunnan farmers.

"to use the meagre efforts of enterprises to help farmers through the 'cold winter' and stabilize the foundation of Yunnan coffee industry is to appeal to more coffee enterprises to join them and get the support of more enterprises and relevant departments, so that Yunnan coffee will no longer be sold cheaply from now on." He said.

Does coffee need a storage system?

Xiong Xiangren pointed out that the price of coffee in Yunnan is low, one is that there is no local protective price, and the other is also related to the low quality of coffee. "some farmers themselves bought a machine-processed coffee for more than 1000 yuan, turning first-grade beans into second-class beans."

Hougu Coffee has the strength to put forward the offer this time, because it is the only coffee enterprise in China with a whole industry chain, and the new 20,000-ton production line will be completed and debugged by the end of this year. At that time, Hougu Coffee will have an intensive and deep processing capacity of 33000 tons of coffee every year. According to the calculation of production capacity, Hougu Coffee Factory will be able to digest 70-80 000 tons of Yunnan coffee.

"as of November 15 this year, with the attention of the government and the support of some financial institutions, the import and export volume of Hougu coffee has exceeded 300 million US dollars, which accounts for more than 50% of China's total coffee imports and exports last year." Xiong Xiangren said.

Yunnan Coffee Industry Association believes that "relying on only one enterprise, the strength is limited." The association suggests that in order to cope with the rising and falling cycle of coffee prices, Yunnan coffee collection and storage system should be established, such as subsidizing warehousing fees and providing discount loans. support coffee enterprises to collect and store coffee at protective prices when the selling price of coffee beans is close to or lower than the planting cost.

It is reported that coffee enterprises in Yunnan are also aware of this problem. In the past year, more and more Yunnan coffee companies are trying to go out and cooperate with Shanghai, Chongqing and Chengdu to build a coffee trading platform.

"with the support of the government and the unity of coffee enterprises, Yunnan coffee can no longer be sold cheaply." Li Gongqin said.

(this article is reproduced)