Origin Focus
11141 views November 2, 2014 posted by Maja Wallengren

ORIGIN FOCUS: CHINA — The World’s Coffee Giant Is Waking Up!

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China is a coffee giant and it’s a fact, even if it’s just now starting to wake up. It’s not only the global economy that moves every time news of China’s economic growth hits the world markets but the coffee industry is too starting to take notice. Yet despite the rapidly growing flow of statistics coming out of China, leading industry associations like the International Coffee Organization and the U.S. Department of Agriculture still do not report or include much, if any, figures for China. Read on for key insight into the coffee market in China today… heart

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4 Comments

  • Yunnan is the coffee area of China. Nestle dominates the coffee scene, buying the majority of the coffee at heavy discounts. Coffee is a money loser for farmers. It was losing money for farmers last year, it’s worse this year. I wouldn’t be surprised farmers start pulling up trees and begin planting something else. At last year’s specialty coffee association of yunnan, a cupping competition was held for the best coffees of Yunnan, none of the samples, including the winning coffee were considered specialty. Many of the coffees had chemical, metallic tastes. Possibly from contaminated water during washing. Because Nestle’s emphasis is on quantity, quality really suffers. Also there is no market for specialty grade coffee from China. starbucks does sell a Cloud blend comprosed of Yunnan’s best. But it’s over roasted, and nothing special. I assume the predominate varietal is catimor, for production purposes. Coffee is picked by hand, but as labor costs increases in China, i don’t see how it will be sustainable when farmers take a loss yearly.

    • Hi Scott, thanks for sharing this insight from your end. I definitively agree with you about the fact that coffee production is a loss-making business for most of the growers, the challenge is this is not only in China’s Yunnan’s province, but in most producing regions of the world and in most of these areas there are few viable options to growing coffee. In the case of Yunnan, if the farmers actually have other viable options it will be interesting to see how the coffee development comes along in the coming years. Please do let us know if you hear of any new developments. Thanks again and best regards, Maja.

    • Looking forward to your China report. As of now, Nestle buy 1 kg of washed coffee for 15 yuan from Yunnan farmers. 6 yuan= 1 USD. 2011, it was 40 Yuan. Fortunately the provincial gov’t do have funds to buy coffee from farmers to cover costs if price falls below production costs, and there are funds to cover farmers for crop damage per hectare of coffee. At one time tea, camellia sinesis predominant the landscape, as the high altitute of 1500 m produce some outstanding Pu’er tea. And tea has consistent value at 30 Yuan per kg, while coffee fluctuate widely. Coffee doesn’t have a long history in Yunnan, Kuming, Pu’er, so farmers new to coffee will consider yanking out coffee and replace with other cash crops if prices stay low. Nestle has promoted shadeless catimor to increase production, whereas Starbucks are promoting shading. At least with shading, farmers can incorporate other nut or friuit producing trees as part of their shade. 70% of coffee is exported following c price. But difficult gaining traction in domestic market as right now Yunnan coffee is considered domestically as low quality yet pricey. The associations in Yunnan want to follow Jamaica’s example of blue mountain and the ambassador of Jamaica has visited often of lower volume but higher prices. Fortunately the domestic coffee industry have a lot of government financial support and funding to keep it viable unlike some central american countries such as Nicaragua.

  • Looking forward to this report as well.

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