Nestle Offers $2.87 Per Kilo for Chinese Coffee

Coffee farmers in China’s largest growing region may be close to the break-even point given the latest purchase price provided by the one of the area’s largest purchasers, global coffee giant Nestle.

This according to a recent report in the Chinese English-language business daily the Morning Whistle, which said that Nestle’s purchase offer for beans produced during the 2012-2013 growing season in the southern part of the Yunnan province was 17.9 yuan (approximately $2.87 USD) per kilo.

That, of course, is not a lot of money. Here’s the Morning Whistle‘s analysis:

It was reported that the price of 17.9 yuan per kilo is very close to the break-even point for coffee farmers, estimated at about 15 to 16 yuan per kilo. Though coffee farmers can still make a profit, the low purchasing price would probably affect their willingness to plant in the next year, which may hurt the development of the coffee industry in Yunnan, according to Hu Lu, vice secretary general of the Yunnan Coffee Industry Association.

The Yunnan Province in China, known historically as the birthplace of Pu-er Tea, has only recently turned to coffee production, after the tea industry collapsed there around 2008. It produces nearly all of China’s coffee exports.

The full story: Morning Whistle