Specialty varieties key to upgrading industry

The coffee market in Yunnan province has seen a favorable shift in pricing dynamics during the latest harvest season, as its coffee beans were sold at a higher price than that offered by international traders, with the province's robust promotion of specialty coffee being a key contributing factor.

The output of Yunnan coffee that accounts for around 1 percent of the global total has posed challenges for its influence on the international supply-demand dynamics and pricing. Coffee from Yunnan has been sold at prices lower than the New York futures price, a standard reference for the global coffee market.

Against this backdrop, industry experts said that specialty coffee can serve as a promising direction for the development of Yunnan coffee, distinguishing it from commercial-grade counterparts.

Internationally, specialty coffee is widely defined as those that score 80 or above on the 100-point scale established by the Specialty Coffee Association, with specific requirements regarding harvesting methods and defect levels.

Specialty coffee holds additional value owing to its high quality, and can be priced independently of the New York futures price, said Huang Jiaxiong, a researcher at the Institute of Tropical Crops at the Yunnan Academy of Agricultural Sciences.

Blessed with fertile soil and a mild climate, Yunnan proved itself capable of cultivating specialty coffee beans eight years ago when Ted Lingle, former president of the SCA, awarded a score of 87 to a type of Yunnan coffee.

In recent years, concerted efforts by the government and the private sector in Yunnan have been made to increase the proportion of specialty coffee, contributing to a rise from less than 8 percent in 2021 to nearly 23 percent last year.

The province has designated 70,000 hectares of land for cultivating specialty coffee, with the aim of promoting the transition from traditional coffee varieties to superior ones such as Geisha, Tippy and Deri. About 8,400 hectares have been planted with these high-quality varieties.

A company in Baoshan city recorded notable market prices for its Geisha coffee during the last harvest season, reaching as much as 1,200 yuan ($166) per kilogram, far exceeding the two-digit price range for commercial beans.

"Specialty coffee is the key to breaking free from the volatile price cycles of green coffee beans," the company's manager Pan Qizuo said.

The 12th Yunnan coffee beans competition was held in Pu'er in mid-May. With more than 130 participating companies, the event saw a surge in the number of international cupping judges, up from three in the first competition to around 300 in this edition. The proportion of specialty beans also doubled to the current 95 percent.

In addition to serving as a platform for identifying the best coffee beans from Yunnan, the competition can also be a catalyst to drive companies to elevate the quality of their coffee production and help bolster the brand image of Yunnan coffee, said Liu Haifeng, executive vice-president of the Yunnan International Coffee Exchange.

The award-winning beans have always been highly sought after by buyers and often fetch high prices at auctions. Last year's champion beans, for instance, were auctioned at a price of 400 yuan per kg.

Although the southwestern province has made notable strides in developing specialty coffee, the industry still faces the challenge of small-scale operations that fail to fully leverage its rich natural resources, noted Zhang Xiong, deputy director of the Pu'er Tea and Coffee Industry Development Center.

Cultivating local leading companies and establishing local brands can be a path forward, Zhang added.