How Has Yunnan Coffee Moved From Low Prices to Specialty?

Yunnan coffee prices stayed low for years because the region, which supplies over 99 percent of China's coffee output, priced its beans against New York futures with little bargaining power. Green coffee bean prices once fell below the cost line of 15 yuan per kilogram. Planting area dropped to about 1.497 million mu in 2020, nearly 20 percent below the 2014 peak of 1.831 million mu.

Quality also shaped demand: weaker lots went mainly into instant products, holding down the region's image. As the specialty wave grew, Yunnan arabica earned attention for a cup that is strong yet not bitter, aromatic without harshness, with a slight fruity note. Growers cut trees or left the crop during the slump, while provincial support and platform backing now aim at the specialty market.

Yunnan, as China's main coffee-producing region, accounts for over 99% of the nation's output, yet for a long time it has used the New York futures price as its pricing benchmark, lacking bargaining power, and green bean prices once fell below the cost line. In recent years, with the rise of the specialty coffee wave, Yunnan coffee is entering the specialty market like a dark horse. From the perspective of Front Street Coffee, this article sorts out Yunnan coffee's pricing dilemma, the current state of production cuts, coffee farmers' rights protection actions, as well as support measures from the provincial party committee and provincial government and major platforms. It also introduces Yunnan coffee's cultivation history, main varieties, and regional terroir, taking you through a comprehensive understanding of the unique charm of Yunnan Arabica coffee—strong yet not bitter, aromatic yet not harsh, with a slight fruity note.

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For a long period in the past, because its quality was not ideal enough, Yunnan coffee was mainly used to produce instant products, which also kept Yunnan coffee's image in consumers' minds less than ideal. However, in recent years, Yunnan coffee has seemed like a dark horse that suddenly burst onto the scene, gradually making its mark in the specialty coffee field.

Yunnan is the core production region for coffee beans in China, accounting for more than 99% of the national output. But for many years, the pricing of Yunnan coffee beans has always referred to the coffee futures prices at the New York futures exchange, leaving it almost no room for bargaining. In recent years, dragged down by the international coffee market, green coffee bean prices have continued to decline, even once falling below the cost line of 15 yuan per kilogram.

Some coffee farmers could not make ends meet and had no ability to invest further, so they could only cut down coffee trees, destroy their plantations, and seek other ways to make a living. Those still persisting in growing coffee also had faces full of helplessness.

Statistics show that in 2020, Yunnan's total coffee planting area was about 1.497 million mu, a reduction of nearly 20% compared with the 2014 peak of 1.831 million mu.

Yunnan: Good Quality, High Price—Specialty Coffee Opens the Market

Pu'er in Yunnan produces more than half of the province's coffee beans, and the number of local coffee farmers exceeds 300,000. Yet despite being a major coffee-producing area, coffee beans have never fetched a good price. To reverse this situation, some young local people began exploring new paths.

Specialty Coffee Becomes Popular—Consumers Fall in Love with Yunnan Beans

Front Street believes that making specialty coffee not only imposes stricter requirements on cultivation and bean selection, but also requires refined processing, with considerable investment of manpower and resources. So how well is such specialty coffee accepted by the market, and can it compete with traditional coffee brands?

In Kunming, the provincial capital closest to the production areas, nearly a thousand cafés of all sizes have opened in recent years. In recent years, by opening up the domestic market and developing specialty coffee, Yunnan has significantly increased its presence, with an equally impressive online performance. In 2020, Yunnan coffee consumption on the Tmall platform reached 245 million yuan, a sharp year-on-year increase of 135%, and the number of Yunnan coffee brands also grew by 80%.

Recently, the Yunnan Coffee Industry Association has successively received multiple complaint letters from coffee farmers, planting cooperatives, and planting enterprises in major coffee-producing areas of Yunnan. The core demand is: Why has Yunnan coffee been sold so cheaply for 30 years? If international coffee giants continue to buy at low prices, coffee growers will continue to cut down trees and give up cultivation. The most common suggestion in the complaint letters is: seek help from public-interest litigation lawyers and sue the international coffee giants!

Yunnan Coffee Suffers Large-Scale Production cuts, Output Nearly Halved

According to incomplete statistics from the Yunnan Coffee Industry Association, by 2020, Yunnan's coffee planting area had plummeted from a peak of more than 1.8 million mu to the current 1.38 million mu. In the 2020–2021 harvest season, Yunnan coffee output is expected to be only 80,000–90,000 tons, nearly halved compared with the peak of 150,000 tons. Some coffee farmers said in complaint letters that if the purchase price continues to be suppressed, this year may be the last harvest. One coffee farmer said: 30 years ago, cabbage was 3 cents a pound, and coffee beans were more than 10 yuan a pound; 30 years later, cabbage has risen to more than 3 yuan a jin, and coffee is still more than 10 yuan a jin. We really can't hold on anymore, and we're preparing to cut down the coffee trees!

Save Yunnan Coffee: They Are Taking Action!

On January 5, 2021, the Yunnan Coffee Industry Association issued a statement: It is obvious that there was a misunderstanding in information communication between the association and Alibaba. Alibaba and the Yunnan Coffee Industry Association share the same original intention: both are helping Yunnan coffee develop better and faster, and helping people live better and happier lives as soon as possible. In addition to Alibaba stating that it will increase support for Yunnan's coffee industry, platforms such as JD.com and Pinduoduo are also actively seeking a way out for Yunnan coffee and helping the industry develop.

Those who care most about the development of Yunnan's coffee industry are the Yunnan Provincial Party Committee, the Provincial Government, and leading cadres in various coffee-producing cities and counties. Since 2013, the average purchase price of Yunnan coffee (Grade I and Grade II) has never exceeded 15 yuan per kilogram, lower than the coffee farmers' cultivation and production costs. It is precisely thanks to the timely assistance of party committees and governments at all levels that Yunnan's coffee industry has weathered difficulties year after year. In particular, the Yunnan Provincial Department of Agriculture and Rural Affairs, Department of Finance, Department of Science and Technology, and Department of Industry and Information Technology allocate hundreds of millions of yuan each year to support the construction of a national-level modern coffee industrial park, "one county, one industry," and innovation in processing. Since the 19th National Congress of the Communist Party of China, the Yunnan Provincial Party Committee and Provincial Government have included coffee in the "Green Food Brand" and the province's eight major plateau characteristic industries. If the party committee and government had not promptly introduced these measures, Yunnan's coffee industry might have faced an even more dangerous situation!

Now look at international coffee companies: they set their own purchasing standards and buy coffee beans at levels below international coffee futures prices. While taking away the reasonable profits that should belong to coffee growers, they also advertise "fair trade" and "international poverty reduction." Just look at countries in Central and South America, Africa, and elsewhere that have grown coffee for hundreds of years, and these lies collapse on their own.

According to incomplete statistics from the Yunnan Coffee Industry Association, Yunnan coffee has been sold at low prices for 30 years. Compared with other regions, Yunnan coffee of the same quality sells for about 3,000 yuan less per ton. Rough estimates put Yunnan coffee's losses over the past 30 years at billions of yuan.

Complaints from Yunnan Farmers

Growers from Yunnan's four major coffee-producing areas—Pu'er, Baoshan, Dehong, and Lincang—believe: First, one kilogram of coffee beans can make about 100 cups of coffee, each selling for more than 20 yuan, but coffee growers do not even get 1% of the revenue. Why do international giants suppress the purchase price so low? Second, from the geographical distribution of coffee cultivation in the world, countries that grow coffee are getting poorer, while countries that trade and consume coffee are getting richer. Are "fair trade" and "international poverty reduction" just banners used by international coffee giants to fool people?

Yunnan coffee farmers are awakening and are about to launch rights protection actions! At present, the International Coffee Exporters Organization is also calling on coffee-growing regions around the world to demand that international coffee giants raise the purchase price of coffee beans; otherwise, coffee growers must actively defend their rights.

In recent years, more and more domestic coffee consumers have chosen Yunnan coffee, supporting the development of Yunnan's coffee industry with practical actions; domestic coffee companies have also successively raised coffee purchase prices. Taking January 2021 as an example, the purchase price of domestic coffee companies is currently about 2,000 yuan per ton higher than that of international giants.

Yunnan Coffee Cultivation History

It can be traced back to 1892, when a French missionary brought coffee seeds into Yunnan from abroad. When he successfully planted the first coffee tree in a place called Zhukula, he probably never imagined that a century later coffee would become a highlight of Yunnan's plateau characteristic agriculture.

After 1930, the famous overseas Chinese leader Mr. Liang Jinshan brought coffee to Pupiao and Luoming for cultivation, which continued after the founding of New China. After 1952, under the guidance of expert Ma Guojin from the Baoshan Tropical Economic Institute, places such as Lujiang began large-scale coffee cultivation, and the history of large-scale planting has now lasted nearly 60 years.

In the mid-20th century, the planting scale once reached 4,000 hectares. By the end of 1997, the province's coffee planting area had reached 7,800 hectares. At present, the province's planting area accounts for 70% of the country's total, and output accounts for 83% of the country's total. Whether judged by planting area or coffee bean output, Yunnan coffee has established a dominant position in China.

Detailed International Standards for Defect Inspection of Arabica Coffee:

Grading is based on the number of defective objects, usually determined by how many defects are contained in a certain amount of coffee beans. According to the method for identifying impurities and defective beans in coffee beans stipulated by the International Organization for Standardization, a 300-gram coffee bean sample is randomly selected, and the number of impurities and defective beans is counted for grading.

Typica and Bourbon, these two classic high-quality coffee varieties, are the main cultivated varieties of Yunnan coffee. In 1991, the Catimor series (with stronger virus resistance and higher yield) was introduced from Kenya; it belongs to a variety of the Arabica species (also known as the small-bean species). Because these two varieties are similar in morphology and habits, mixed cultivation is often adopted.

Yunnan Coffee Producing Areas

Western and southern Yunnan are located between 15 degrees north latitude and the Tropic of Cancer, with most areas at elevations of 1,000–2,000 meters. The terrain is mainly mountainous and sloping, with considerable undulation, fertile soil, abundant sunshine, ample rainfall, and large temperature differences between day and night. These unique natural conditions give Yunnan Arabica coffee its special flavor—strong yet not bitter, aromatic yet not harsh, with a slight fruity note. Yunnan coffee is mainly distributed in Lincang, Baoshan, Pu'er, Dehong, and other places. The natural resources here—low latitude, high altitude, and large temperature differences between day and night—make Yunnan a golden growing region for producing high-quality Arabica (small-bean) coffee.

Yunnan coffee is our own Chinese coffee, and this brand is also gradually rising.

The above content is compiled by CoffeeHunters, a coffee news website.