In the past two to three years, affected by the pandemic, the logistics and inventory of imported coffee beans encountered obstacles, while the price of Yunnan's local coffee beans gained upward support as a result, injecting a rare positive into local coffee enterprises. Looking back ten years, Yunnan coffee bean prices were depressed for a long time, and growers' confidence was shaken; today, a purchase price of 35 yuan/kg has broken through historical levels. Hu Lu, deputy secretary-general of the Yunnan Coffee Industry Association, pointed out that this price is undoubtedly a shot in the arm for Yunnan's coffee industry, which is in a winter period. If this price level can remain stable for three to five years, the whole province is expected to see a new wave of planting enthusiasm. At the same time, the market expects this round of increases to continue until June or July, when Brazil and Colombia enter their harvest seasons, and changes in output may trigger a new round of fluctuations. Front Street Coffee reminds enthusiasts to pay attention to developments in the producing areas and grasp the dual changes in flavor and price.
Due to the pandemic, the logistics and inventory of imported beans were affected over the past two to three years, while at the same time Yunnan bean prices gained upward support, which undoubtedly brings benefits to Yunnan coffee enterprises. Ten years ago, low Yunnan coffee bean prices led to spreading pessimism among local coffee growers, and price increases will bring greater enthusiasm to coffee farmers, enterprises, financial institutions, and even government departments. If a price above 35 yuan/kg can be maintained for 3–5 years, the whole province will welcome a new wave of planting enthusiasm.
"From the purchasing situation of Yunnan coffee over the past 10 years, the average price should be below 25–26 yuan. The current purchase price of 35 yuan/kg has already exceeded previous levels, but for Yunnan coffee in its winter period, it is undoubtedly good news." Hu Lu, deputy secretary-general of the Yunnan Coffee Industry Association, said that coffee farmers' planting cost is around 15 yuan/kg. In November 2013, coffee futures prices once fell to 107 cents/lb, equivalent to 14.3 yuan/kg. Although many enterprises still insisted on purchasing at the protective price of 15 yuan/kg, the depressed prices still dealt a huge blow to Yunnan's coffee industry, and in some places there were even cases of abandoning harvesting. During Front Street Coffee's visits to the producing areas, it was also observed that some coffee farmers reduced their investment in care and management due to poor returns, and the current price recovery is expected to improve this situation.
It is expected that this upward trend will continue until June and July, when coffee beans from Brazil and Colombia will enter the harvest season. If coffee production in these places is greatly affected by drought, there will again be major fluctuations; if the impact is not significant, the purchase price will remain at 300 cents/lb.
The above content is compiled by CoffeeHunters, a coffee news website.
