Yunnan Arabica Coffee Prices & Quality: Why Are Yunnan Coffee Beans So Affordable?

FrontStreet Coffee - Quality and Price of Yunnan Small-Bean Coffee

Coffee is a beverage crop of high economic value, ranked alongside cocoa and tea as one of the world's three great beverages, with production and consumption placing it first among the three. Coffee originated in the tropics of Africa, and thanks to its rich content of protein, fat, sucrose, starch, glucose, caffeine and other substances, it has a rich aroma and pleasant taste.

Since the 15th century coffee has gradually spread across the world; today more than 70 countries and regions grow it. Coffee is a perennial evergreen shrub or small tree of the Rubiaceae family and Coffea genus, with many varieties. The widely cultivated types include small-bean (Arabica), medium-bean (Robusta), large-bean (Liberica) and Excelsa. Among these, the small-bean variety - known as "aromatic coffee" - has the highest production, accounting for over 80% of total coffee output.

The tropical and subtropical regions and low-heat valley areas of southern and southwestern Yunnan Province are all suitable for cultivating small-bean coffee. Yunnan has 80-90 years of coffee-growing history. All coffee produced in Yunnan is small-bean coffee, characterized by uniform, full beans, a mellow taste and high aroma, which makes it very popular in export markets. In recent years, places such as Lincang, Baoshan, Dehong and Xishuangbanna have leveraged their natural advantages to gradually expand cultivation; production has grown steadily and the prospects are promising.

Historical Development

In 1892, when a French missionary successfully planted the first coffee tree in a place called Zhukula to meet his own coffee needs, he probably never imagined that a century later coffee would become a highlight of Yunnan's plateau specialty agriculture. Yunnan Province began large-scale coffee cultivation in the 1950s. The "Yunnan Province Coffee Industry Development Plan (2010-2020)" issued in 2011 set a new direction for the industry.

Baoshan, Pu'er and Dehong are the golden coffee-growing areas. Abundant low-latitude, high-altitude tropical resources and large day-night temperature differences make Yunnan a golden growing region for quality Arabica (small-bean) coffee.

Regional Coffee Development

After more than 60 years of development, Baoshan's small-bean coffee industry has reached a considerable scale, becoming a specialty industry with an annual output value of nearly 500 million yuan. Baoshan's coffee has compiled an impressive record: at the 1980 National Coffee Conference, Baoshan small-bean coffee was hailed as "the crown of national coffee"; in 1992, at the first China Agricultural Expo, it was awarded the highest silver medal; in 1993 it won the Eureka Gold Award at the 42nd Brussels Eureka Expo in Belgium. Last year, Pu'er City's coffee cultivation area reached 650,000 mu, making it China's largest coffee-growing area with the highest production and best quality, as well as a major distribution center for coffee trade.

While growing "quantity," Pu'er is also pursuing breakthroughs in "quality." In recent years the Pu'er municipal government, enterprises and farmers have strengthened variety selection and deep processing, brought in international coffee giants to learn cultivation and production techniques, and "gone global" to expand markets while improving raw material quality, letting the Pu'er coffee brand emerge and grow. Measures such as building coffee estates, coffee museums and coffee culture streets, and hosting the China Coffee Culture Festival, have gradually unfolded the blueprint for Pu'er's coffee industry.

In the Dehong Dai and Jingpo Autonomous Prefecture, mature price-protection mechanisms, technological support and comprehensive management systems give growers confidence. Dehong Hougu Coffee Co., Ltd., for example, has fully played its leading role since 2004, implementing "three guarantees and three unifications": guaranteed prices, guaranteed investment and guaranteed quality, with unified procurement, unified processing and unified sales.

Market Challenges and Opportunities

Bumper harvests do not mean good harvests - quality determines market power. Statistics show that in 2012 Yunnan's coffee cultivation area exceeded 1.3 million mu, with production reaching 65,000 tons, year-on-year increases of 90% and 62% respectively; the cultivation area had already hit the 2015 target ahead of schedule. That year Yunnan's average coffee yield per mu reached 225 kg, yet the domestic market price was only 16-17 yuan/kg. Despite the general decline in global acquisition prices, the fact that Yunnan coffee did not fetch good prices gives cause for reflection. Brazil's yield per mu is around 80 kg, selling at 30-33 yuan/kg; Colombia's is 52 kg, selling at 35-38 yuan/kg.

Many people believe the shrinkage in Yunnan coffee prices is because growers lack pricing power. "This is a misconception," says Li Gongqin, Secretary-General of the Yunnan Province Coffee Industry Association. Although Yunnan's coffee area and production account for over 98% of the national total, they represent less than 1% of world production. Even if all suitable land in Yunnan were planted with coffee, the share would still be small - pricing power cannot come from production volume alone.

"Although gaining pricing power is unrealistic, we can strive for market voice," Li Gongqin believes, and the key to market voice is quality. As an example, Jamaica's Blue Mountain had only 2,400 tons of production in 2012, yet its green bean sold domestically at 400-500 yuan per kg - precisely because of its high quality.

Professor Cheng Da of the Yunnan Provincial Government's Bio-industry Office believes Yunnan's goal of developing a specialty coffee industry is correct, but in practice scientific industry planning has not followed market demands and trends, and the industry lacks an overall design. Neglect of management and a lack of technical support in post-harvest processing have caused significant loss of value from otherwise advantageous resources.

Industry Standards and Development Strategy

Establishing standards and building leaders means focusing on the "Yunnan Coffee" brand. From cultivation to commercial product, coffee passes through multiple stages - harvesting, pulping, fermentation and more - and any stage determines quality. There is a saying in the industry: "Because the Yunnan coffee industry lacks unified quality standards that are consistently implemented, buyers can use their own standards to tour Yunnan's growing areas and suppress acquisition prices from over 20 yuan to just over 10 yuan." Li Gongqin believes the government should quickly establish standards for coffee cultivation and processing, formulate unified quality standards for Yunnan coffee and ensure their effective implementation to enhance market competitiveness.

FrontStreet Coffee Recommendation

Reading all this, you may wonder what Yunnan coffee actually tastes like. The FrontStreet Yunnan small-bean house coffee, from the Baoshan growing region, is the ideal first taste: washed processed and medium roasted, it brews into a soft, balanced cup of nutty and chocolate sweetness with a light plum-like acidity, at a very friendly price - many people's first encounter with Chinese specialty coffee.

For a clearer expression of Yunnan terroir, try the FrontStreet 2013 Yunnan Typica from FrontStreet's own estate. Typica is one of the oldest and purest Arabica varieties, and after natural processing and a medium roast it shows hazelnut, dried apricot, black tea, caramel and ripe plum, with a heavier body and more pronounced sweet-and-sour balance than the washed coffee.

To enjoy Yunnan flavors as espresso, the FrontStreet Black Cocoa Blend combines Yunnan small-bean coffee with Brazilian Cerrado beans: Brazil supplies mixed-nut aroma and balance, Yunnan adds chocolate and citrus notes, and the resulting Americano is sweet, smooth and well balanced - with an almond-and-cream silkiness in the latte. It is a great pick for beginners.