China's coffee prices once again fell into a trough

The harvest of Yunnan coffee begins in late October of each year and continues until March of the following year. The coffee beans harvested in that year began to be exported from the end of November. It is reported that the pricing of coffee trade in Yunnan (bargaining) is mainly to look at the price of the international market (New York futures market), many companies also based on Nestle's purchase price in the local, combined with other companies in the Yunnan market quotation pricing and bargaining.

On November 20, 2012, Nestle's opening price as the windbreaker of Yunnan coffee purchase price was RMB 17.9/kg, which was lower than the same period of last year. On January 5th, Starbucks Love Coffee (Yunnan) Co., Ltd. had a purchase price of 17.79 yuan/kg for coffee, and local companies in Yunnan had similar prices. At present, the purchase price of Yunnan coffee beans has fluctuate around 17 yuan to 18 yuan/kg.

Li Gongqin, secretary-general of the Yunnan Coffee Association, introduced that the decline in the coffee market price began in the last season. In the previous season, the highest price of New York futures was 304.55 cents/lb (the highest purchase price in the Yunnan market was 40 yuan/kg), while in the Yunnan market opened in 2012, the futures price in New York was 157.40 cents/lb, and Nestlé offered 17.90 yuan/kg. A record low of 5 years.

The industry believes that this round of low prices is a cyclical fluctuation in the coffee market. Looking at the trend of coffee prices in Yunnan in the past 20 years: a price cycle of almost every 10 years. In 2010, the price of coffee in Yunnan reached 41 yuan per kilogram, a record high; however, in 2002, the situation faced by Yunnan coffee was coffee beans. The price dropped to the lowest point of more than 7 yuan per kilogram.

The pricing power is far from being reachable. According to Ma Chi, Director of the Economic Crops Division of Yunnan Provincial Department of Agriculture, and Li Gongqin, Secretary General of the Yunnan Coffee Industry Association, the global coffee market is completely market-oriented and the price is highly transparent. Yunnan is no exception. The price fluctuates with the price of the New York coffee futures market.

"This round of coffee price fall in China is caused by the fluctuation of coffee prices in the international market. This is behind the combination of various factors such as the increase in the production of major coffee-producing countries in the world, the lack of discourse power in China's coffee pricing, and speculation by international speculators." Ma Chi said.

For a long time, the international coffee consumption market is basically in a balance between supply and demand. However, due to recent years, Brazil, Vietnam, Colombia, and other major coffee producing countries in the world have strengthened their management, and coffee production has not been affected by natural disasters. This has resulted in an increase in global coffee production, and only in Vietnam. Compared with the increase of 500,000 tons three years ago, new demands have changed in the international market;

According to Li Gongqin, according to statistics from relevant agencies, the production of coffee in major coffee producing countries such as Brazil, Vietnam, and Colombia has increased since last year. Only Vietnam’s output has increased by 500,000 tons compared with three years ago, and Brazil’s coffee output has reached 3.354 million tons. Last year, the increase in production of 400,000 tons, the balance of supply and demand in the international coffee consumer market has been broken.

The industry believes that coffee is the world's largest trading commodity, and the fluctuation of the international coffee market price is also related to the degree of international financial attention. Once international funds short the international coffee market, the price of coffee will have a larger decline. The "Economic Information Daily (microblogging)" reporter learned from a number of enterprises engaged in coffee import and export trade that the two years of coffee trade in the world have the shadow of international financial capital.

Whether it is Brazil, Colombia or Yunnan, the international coffee market is heavily dependent. Ma Chi introduced that Yunnan coffee production is expected to reach 82,000 tons in 2012-2013, but still less than 1% of the world's total coffee output of 8.5 million tons.

Dong Zhihua, vice president of the Yunnan Coffee Industry Association, said that this round of price fluctuations revealed the great market risk of Yunnan coffee relying heavily on parity exports. The added value of the industry is extremely low, the industry chain is not long, and there is a lack of large-scale integrated coffee deep processing industry. Leading companies and brands have not played a leading role in both domestic and international market share and market evaluation.

“It can be said that the coffee production in China has little effect on the price of the international coffee market but it is greatly constrained. Furthermore, the intensive processing of the coffee industry in Yunnan, lack of branding, and lack of market development can only rely on international coffee at this stage. Enterprises, this situation is difficult to change in the short term." Ma Chi thinks.

Behind this is the lack of large-scale brand enterprises that use Yunnan coffee as their main raw material. Ma Chi said that Yunnan's coffee output is not much, even if it reaches the long-term target of 200,000 tons, it only accounts for about 2% of global production. However, without their own coffee backbone enterprises, they are always subject to control. While international coffee giants are sourcing globally, the purchase of Yunnan coffee has always been limited.

The outlook of the coffee industry is still promising. Based on the cost of coffee, coffee demand and exports in the international and domestic markets, coffee industry analysts believe that even if the market price of coffee beans continues to decline in 2013, the coffee industry in Yunnan will not repeat the same mistakes that occurred in 2002. In the case of coffee trees, there is no excess of coffee in Yunnan.

"Economic Information Daily" reporter learned in Pu'er, Baoshan and other places that the cost price of coffee beans is about 12 to 15 yuan per kilogram. Since Shao Fang said that although the labor costs have increased significantly in recent years, the price of coffee beans has not fallen below the cost price. The cost of one kilogram of coffee beans in Dakaihe Village is around RMB 12 per kilogram, which is lower than the current purchase price of RMB 18 per kilogram.

At present, the impact of the low price of coffee beans on the development of coffee industry and the increase in income of coffee farmers in 2013 is not yet clear. According to Ma Chi, head of the Economic Crops Division of the Yunnan Provincial Department of Agriculture’s Thermal District, Yunnan coffee exports are mainly concentrated in the first half of the year, especially from January to March. Currently, the major period of export has not yet entered, and the current purchase price cannot reflect the whole year. The purchase price situation.

At the same time, the current level of coffee harvested in the province is not the same, and the quality of processed coffee beans is not as good as in the later period, so the purchase price is generally lower than the latter period. In addition, most of Yunnan's coffee is newly planted in recent years, and its current production area is only 587,600 mu. More than half of the coffee has not yet been put into production, and the output has not entered the peak period of production.

Some analysts believe that the international and domestic market demand for coffee is still strong. According to statistics, the average growth rate of coffee consumption in the world's oldest coffee consumer countries is about 1.5%, and the growth rate of coffee consumption in emerging coffee consumer countries is relatively large. Indonesia's coffee consumption in the five years has increased by 50%. China's current per capita consumption is extremely low. The annual consumption is only about 60,000 tons. However, the annual consumption growth is close to 15%, and the consumption space is huge. The consumption patterns from instant coffee to store consumption also continue to mature.

Due to strong demand, the export of Yunnan coffee beans has continued to grow. Shimao Beigui Coffee Co., Ltd., which started operating coffee in 1988, Deng Jialu, general manager, is busy shipping to Germany. “The price of coffee has followed the international market. Although the price is low, the sales of Yunnan coffee have not been affected. This is my confidence. The most fearful is that there is no one who wants to have low prices and rotten in the ground,” Deng said.

The special geographical environment also determines the limits of the coffee growing area, which has also become a major motivation for the coffee industry in Yunnan and Pu'er. Nestlé and Starbucks' arrival in Pu'er City have become an inspiring example. Coupled with the increasing consumption in China every year, the industry is generally optimistic about the prospects of Yunnan coffee.

“At present, despite experiencing a low price, this is not the winter of China's coffee planting industry. According to the growth cycle of three to four years of fruiting of coffee, after the current price trough is planted, it will usher in a fruit period when the price rises. It is currently To develop coffee planting opportunities," said Xiong Xianglu, chairman of Yunnan Hougu Group.