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Drought Threatens Tens of Thousands of Acres of Yunnan Baoshan Coffee as Expansion Concerns Emerge Behind Disorderly Competition

Published: 2026-01-27 Author: FrontStreet Coffee

Last Updated: 2026/01/27, Continued drought has impacted the coffee industry in Yunnan's Baoshan, one of China's major coffee-producing regions. According to survey data from Baoshan City's Longyang District Tropical Crop Station, the disaster-affected coffee area within Longyang District alone has reached 66,395 mu, with 16,321 mu of coffee facing total crop failure. Beyond the drought's impact, depressed coffee prices have also left many coffee farmers concerned

Persistent Drought Devastates Yunnan's Coffee Industry in Baoshan

Continuous drought has severely impacted the coffee industry in Baoshan, one of China's major coffee-producing regions. According to survey data from the Tropical Crop Station of Longyang District in Baoshan, the disaster-affected coffee area has reached 66,395 mu within Longyang District alone, with 16,321 mu facing total crop failure.

Price Decline Exacerbates Farmers' Hardships

Beyond the drought's impact, low coffee prices have also caused considerable concern among coffee farmers. During interviews with National Business Daily reporters, it was learned that many regions have already seen instances of coffee trees being cut down to make way for vegetable crops and other alternatives. Several local industry insiders mentioned that if coffee prices remain depressed, large-scale cutting of coffee trees is likely to occur within the next two to three years.

Meanwhile, although Baoshan was one of the earliest regions to cultivate coffee, its local coffee industry faces developmental lag, even being surpassed by latecomers like Pu'er and Dehong within Yunnan Province.

Industry insiders widely believe that the lack of leading enterprises' driving role has become one of the factors constraining Baoshan's coffee industry development. Behind this lies disordered competition phenomena, including local enterprises undercutting each other's prices and even passing off inferior products as quality ones.

Severe Economic Losses for Coffee Farmers

In late March, National Business Daily reporters visited Baoshan. In a coffee plantation in Lujiangba, Longyang District, reporters observed that even after light rain in the morning, the soil remained extremely dry, with many coffee trees already dead. Several coffee farmers were digging irrigation ditches to water their coffee trees.

"The drought has affected local coffee cultivation, with large-scale death of coffee trees occurring in Kulaovillage (phonetic) in Lujiang Town, where the drought situation is particularly prominent," said a responsible official from the Baoshan Agriculture Bureau.

From March 12-19, 2013, the Longyang District Tropical Crop Station conducted surveys covering six townships including Mangkuan, Lujiang, Yangliu, Pupiao, Wama, and Wafang, encompassing 57 villages, 385 village groups, six coffee production enterprises, five coffee planting professional cooperatives, four farms (Lujiang, Xincheng, Zhiqing, Dahongpo), and the Provincial Tropical Economic Research Institute. The investigation revealed that Longyang District had experienced 150 consecutive days of drought and minimal rainfall, severely impacting the coffee industry. The disaster-affected area continued to expand, reaching 66,395 mu, with 40,284 mu severely damaged and 16,321 mu facing total failure, causing severe economic losses for coffee farmers.

Zhang Huachang, deputy head of the Longyang District Tropical Crop Station who led this investigation, told reporters that the drought caused over 10,000 mu of coffee in Longyang District to face total failure, with significant impact. According to relevant statistical methods, yield loss of 70% or above is considered total failure, not necessarily complete tree death. Yield loss between 30-60% is defined as severe damage, while under 30% is considered disaster-affected.

A deputy director surnamed Chen from the Longyang District Agriculture Bureau stated that Baoshan has experienced consecutive years of drought. Generally, drought has a greater impact on coffee trees planted on slopes. On one hand, irrigation is inconvenient, and on the other, the soil layer is thinner. Moreover, drought affects coffee yields for two years - the first year may see no income, and it takes another year for production to recover.

The vast majority of Baoshan's coffee cultivation occurs in Longyang District, with most of Longyang District's coffee located in Lujiang Town. However, during interviews, reporters did not obtain statistical data on coffee disaster areas outside Longyang District.

Xinzhai Village in Lujiang Town, known as "China's No. 1 Coffee Village," has a coffee cultivation area exceeding 10,000 mu. A villager surnamed Duan from Xinzhai Village told reporters that he planted 18 mu of coffee this year, but due to drought impacts, coffee fruit production was low, and harvest yields were mediocre.

Xie Xianwen, general manager of Xinzhai Coffee Co., Ltd., one of Baoshan's larger-scale coffee enterprises, told reporters that it's estimated this year's drought will cause a coffee production reduction of approximately 6,000-7,000 tons throughout Baoshan. Baoshan's current total coffee production is around 25,000 tons.

Growing Vegetables More Profitable Than Coffee?

The responsible official from the Baoshan Agriculture Bureau mentioned that Baoshan's coffee cultivation currently faces two problems: first, prominent drought and poor infrastructure; second, due to poor infrastructure, technology promotion is inadequate, and promoting coffee varieties that are both high-yielding and quality-good has become a bottleneck.

Regarding solutions to the drought problem, he said, "Various government departments have made efforts around the coffee industry to improve infrastructure. Sprinkler irrigation equipment in Xinzhai has been installed, with the government investing 20 million yuan in Xinzhai Village alone. Additionally, the government is building a reservoir in Lujiangba, which will allow water from the Lujiang River to be diverted to coffee plantations in the future, bringing fundamental changes to Baoshan's coffee industry."

During interviews in Xinzhai Village, reporters also saw workers installing irrigation pipes, with many irrigation facilities already constructed in coffee plantations along both sides of the roads.

However, depressed coffee prices have caused even greater concern among many coffee farmers.

It is understood that this year's local coffee purchase prices in Baoshan are mostly around 15-16 yuan per kilogram. In 2010, prices could reach 30 yuan per kilogram, meaning current prices are only about half of what they were.

Depressed prices have also affected the interests of many coffee farmers. Among the 18 mu of coffee fields owned by the aforementioned Duan villager from Xinzhai Village, 10 mu were contracted for 50,000 yuan over 20 years. He told reporters that current coffee prices are relatively low, but labor costs are increasing, with daily wages now reaching 50 yuan, making coffee cultivation "quite unprofitable."

Reporters learned that even in Lujiang Town, where coffee cultivation has advantages, many people have found that growing coffee may be less profitable than growing vegetables, and may even be less lucrative than migrant work.

The responsible official from the Baoshan Agriculture Bureau stated that with improved transportation, many people have discovered that growing vegetables can be profitable, as during good price periods, one mu of vegetables can generate output value reaching 20,000 yuan.

In fact, in 2002, when coffee bean prices dropped sharply, numerous coffee farmers unable to accept low prices纷纷 cut down coffee trees to switch to sugarcane, tea, and other crops. That year, Yunnan's coffee cultivation area shrank dramatically.

A coffee farmer who has been growing coffee in Lujiangba for over 20 years told reporters that cases of cutting down (coffee trees) to plant other cash crops have occurred among people around him.

Yang Zhengqing, Party Secretary of the Longyang District Agriculture Bureau, stated that Longyang District has also seen cases of coffee farmers cutting down coffee trees to plant other cash crops, but this situation is not widespread, with less than 100 mu of destroyed area.

Several industry insiders stated in interviews that generally, coffee growers can withstand 2-3 years of depressed prices, but if this period is exceeded, large-scale tree cutting may occur.

Survey data from the Longyang District Tropical Crop Station shows that Longyang District currently has 169,885 mu of coffee cultivation area, with a planned planting area of 2,872.5 mu for 2013, of which 1,223.5 mu has been implemented, accounting for 42.59% of the planned area. Currently planted area is 535 mu, representing 18.62% of the planned area and 43.73% of the implemented area respectively. Low-improvement (stump pruning) area is 5,506.4 mu, destroyed area is 2,635 mu, with 7.26 million seedlings cultivated.

Zhang Huachang stated that among the aforementioned 2,635 mu of destroyed area, most of the cut trees were older coffee trees, some replaced with new coffee seedlings, while others were used by farmers to plant corn.

Development Lag and Industry Disorder

Although Baoshan started coffee cultivation relatively early, its development has lagged behind even when compared to other areas within Yunnan Province.

According to the "Yunnan Province Coffee Industry Development Plan (2010-2020)," Pu'er City's cultivation area will surpass Baoshan, while Dehong will match Baoshan. In reality, however, coffee industry development in Pu'er, Dehong, and other areas has been exceptionally rapid.

According to reports from the Pu'er Daily, by the end of 2012, Pu'er City had 650,000 mu of coffee, with 270,000 mu in production, yielding 36,500 tons of coffee and achieving output value of 900 million yuan. Additionally, Pu'er City aims to have 1 million mu of coffee cultivation area by 2016, with 700,000 mu in production, annual coffee bean production of 100,000 tons, and total coffee industry output value exceeding 10 billion yuan. Moreover, international giants like Starbucks and Nestlé also conduct significant procurement activities in Pu'er.

Dehong Prefecture also claims to have 260,000 mu of coffee cultivation area and possesses the nation's largest coffee deep processing production line.

The responsible official from the Baoshan Agriculture Bureau told reporters that Pu'er and Dehong are latecomers in coffee cultivation, with local leaders placing considerable importance on it. Pu'er's scale is larger than Baoshan's, while Dehong benefits from having leading enterprises like HOGU Coffee.

During interviews, reporters learned that while Baoshan's coffee industry development is relatively lagging, the industry has also shown chaotic phenomena such as disordered competition.

Several Baoshan local coffee industry figures stated that many people in Baoshan work with coffee, but most are scattered, disorganized, and small-scale, failing to form a community or brand. Outsiders don't know which ones are good, leading to disordered competition, wasted resources, and failure to maximize value utilization.

The responsible official from the Baoshan Agriculture Bureau stated that the core problem facing Baoshan's coffee industry is the lack of decent leading enterprises. It has over ten production enterprises and more than thirty including distribution enterprises, but all are small-scale operations with limited driving impact on Baoshan's coffee industry. Previous statistics showed that 80-90% of Baoshan's coffee industry involved selling raw materials.

According to local sources, Baoshan enterprises have also engaged in mutual price undercutting. When facing major procurement clients, if Company A quotes 10 yuan to get an order, Company B might quote 9.8 yuan to compete, and then Company C might offer 9.3 yuan, competing at even lower prices, ultimately resulting in no one making profits. Moreover, some people, after obtaining orders at low prices, might even pass off inferior products as quality ones, adversely affecting the entire industry.

Xie Xianwen, general manager of Baoshan Xinzhai Coffee Co., Ltd., suggested that the government should guide local enterprises to form synergies, standardize operations, and avoid vicious internal competition. Furthermore, consideration should be given to coffee farmers and the interests of all links in the chain. If Baoshan's coffee industry could be integrated, it should achieve output value no less than 10 billion yuan. Currently, it doesn't exceed 1 billion, and this year might only be around 500 million yuan.

Chen Xinxue, president of the Baoshan Coffee Chamber of Commerce, also called on the government to pay attention to the coffee industry during interviews with National Business Daily reporters.

Extended Reading: Rapid Expansion of Baoshan's Coffee Cultivation Area in Recent Years

Since beginning coffee cultivation in 1952, Baoshan's coffee cultivation area has experienced several fluctuations.

According to records, Baoshan's coffee cultivation area reached nearly 670 hectares (1 hectare = 15 mu) in 1969, gradually shrinking due to market influences to 200 hectares by the early 1980s. It gradually developed again in the mid-to-late 1980s, and in the mid-1990s, affected by international market prices, coffee prices rose to their peak, exceeding 30 yuan per kilogram, causing Baoshan coffee cultivation to heat up again, expanding to 6,667 hectares by the late 20th century. However, due to falling international market prices, rough local coffee processing technology, and poor product circulation, Baoshan coffee prices fell to a trough, dropping to 6 yuan per kilogram. By 2003, the city's coffee cultivation area was approximately 5,333 hectares (about 80,000 mu), with production of 5,809 tons, accounting for 42.3% of the province's total production.

So what is Baoshan's current coffee cultivation area?

Statistical data obtained by reporters from the Baoshan Coffee Chamber of Commerce shows that in 2011, Baoshan's coffee cultivation area was 223,700 mu, production was 25,000 tons, and agricultural output value was 662 million yuan. In 2012, the cultivation area was 256,700 mu, production was around 38,700 tons, and estimated agricultural output value was approximately 725 million yuan.

However, information learned by reporters from the Baoshan Agriculture Bureau shows that in 2012, Baoshan's coffee cultivation area was 150,000 mu, with production under 20,000 tons. This shows significant discrepancies compared to the Baoshan Coffee Chamber of Commerce data, both in cultivation area and production volume.

Regarding this, a responsible official from the Baoshan Agriculture Bureau stated they were unclear why these differences existed. However, a local Baoshan coffee enterprise manager told reporters that Yunnan's "12th Five-Year Plan" aimed for 1 million mu of coffee cultivation area, and the currently reported figures have already reached and exceeded this target, but actual cultivation area might not reach this level, with reported areas from various regions containing inflated figures. For example, some places might only have planted 100,000 mu but reported 130,000 mu, or even 200,000 mu. Instant coffee.

Regardless, Baoshan's coffee cultivation area has experienced significant expansion in recent years. In the "Yunnan Province Coffee Industry Development Plan (2010-2020)," Yunnan has listed Baoshan as one of the province's coffee bean production bases, with Baoshan's coffee cultivation area to develop to 200,000 mu by 2015 and 300,000 mu by 2020.

A document from the Baoshan Coffee Chamber of Commerce proposes that Baoshan's tropical zone cultivated land area is 1.278 million mu, with current coffee cultivation area accounting for only 37.02% of tropical zone cultivated land, indicating significant potential and space for Baoshan's coffee production development.

According to the aforementioned plans, Yunnan's coffee cultivation area will also see large-scale expansion. By 2015, the province's coffee cultivation area is expected to develop to 1 million mu, with 800,000 mu in production, annual coffee bean production of 96,000 tons, and total output value exceeding 17 billion yuan. By 2020, the province's coffee cultivation area will stabilize at around 1.5 million mu, with annual green coffee bean production of 200,000 tons, and total output value exceeding 34 billion yuan.

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