Coffee futures prices continue to rise, bringing business opportunities to coffee farmers but putting pressure on retail ends.
Recently, Starbucks announced that it has reached a strategic cooperation with Boyu Investment. The two parties have established a joint venture to jointly operate Starbucks 'retail business in the China market. This has brought the public's attention to the coffee market again.
With the massive expansion and frequent launch of new products by brands such as Luckin, MANNER, and M stand, established coffee companies such as Starbucks feel under pressure. The most realistic problem is the price war. Once 9 yuan coffee comes out, retail companies dare not raise prices, but costs are rising. The price of U.S. Type C coffee futures (KC.NYB), which is the benchmark of global coffee prices, is still running at a high of 400 cents/pound. Coffee futures prices continue to rise, bringing business opportunities to coffee farmers, but also bringing pressure to coffee retail outlets.
Coffee futures once rose more than gold. On December 10 last year, coffee futures reached 336.4 cents/pound in intraday trading, which was a cumulative increase of more than 70% compared with the opening price of 188.5 cents/pound on January 2 last year, far exceeding the increase in gold during the same period.
Since July this year, the price of coffee beans has been rising again after falling back to 271.09 cents/pound. On October 23, it once reached 437.95 cents/pound in intraday trading, setting a record high again. At present, coffee futures prices are still running at a high level. As of the reporter's press release on November 8, the U.S. Coffee Futures (KC.NYB) reported 388.38 cents/pound, an increase of 2.46%. As of the week ending November 7, ICE Arabica coffee futures rose 4.94%, and coffee "C" futures rose 4.30%. In comparison, ICE raw sugar futures fell 2.08%, and ICEwhite sugar futures fell 1.19%, which shows that coffee futures prices are strong.
The First Financial Reporter learned that there are both market factors and weather-level accidents that have caused this round of coffee futures prices to continue to rise. Prices of coffee beans have fluctuated due to the impact of climate change on global production. In October this year, coffee bean futures prices continued to run at high levels, showing violent fluctuations. Pacific Securities data shows that Arabica coffee futures prices exceeded 430 cents per pound in February 2025, a 47-year high, with an increase of 118.57% in the past year.
Institutional research reports show that although the current coffee bean futures price has hit a record high, Arabica coffee production is still lower than the highest production in history, and the trend of declining proportion of output is more obvious year by year. USDA estimates that global Arabica coffee production in 2025/26 will be 470,000 tons (-7.5%) lower than the historical peak of 6.3 million tons (2018/2019). From the perspective of consumption structure, consumption of freshly ground coffee has grown rapidly in recent years, and there is strong demand for Arabica coffee. On the one hand, production is declining, and on the other hand, demand is growing. Structural contradictions in the global Arabica coffee market continue to be prominent.
On the other hand, there are also unexpected factors in this round of coffee bean price increases, which are due to weather conditions such as Brazil and other major producing countries.Brazil accounts for a relatively high proportion of Arabica coffee production. In August 2025, Brazil's main coffee-producing areas suffered frost. Although the overall impact was limited, it caused expectations of production cuts and also promoted the continued rise in futures prices.
According to the International Coffee Organization report, drought and heavy rain occurred in Brazil from August to September 2024, resulting in a reduction in coffee bean production. In August 2025, frost occurred in Brazil. Although the overall impact is limited, it may still cause a reduction in production. In addition, affected by factors such as the EU's "Zero Deforestation Act", some European and American traders have accelerated their hoarding, which has also tightened market demand.
A person in charge of a domestic food company told the First Financial Reporter that Arabica coffee beans in U.S. Type C coffee futures have increased by an alarming amount, while Robusta coffee bean futures used in the food industry have also increased by about 60%.
Many years ago, Cai Qingkai from Yunnan was a truck driver who specialized in long-distance travel. She often drove hundreds of kilometers a day to earn money to support her family. When he stayed up late and hurried, he would make a cup of instant coffee to refresh himself. Over time, Cai Qingkai gradually fell in love with coffee. Coupled with the influence of his friends and relatives who grew coffee, he made a bold decision-grow coffee! Cai Qingkai decisively sold her house and purchased a hectare of land in Pu 'er. At that time, he always thought that growing coffee should be an easy task.
But reality is always cruel. It usually takes a full three years from the time a coffee seed is buried in the soil to the time the first fruit is produced. In the words of Cai Qingkai in the past three years, it has been 100 times more bitter than a cup of extra strong Italian concentrate. There was a lack of water for irrigation, no money to buy fertilizer, and diseases and pests. All problems were encountered for the first time, and everything came so unprepared. During the most difficult time, he simply took his wife and lived in his truck and on the mountain.
But Cai Qingkai did not give up. After improvement and professional improvement, Cai Qingkai finally harvested the first batch of coffee fruits. "From the first delivery of only 7 bags of fresh coffee fruits to the current annual output of 160 tons of fresh coffee fruits, from experiencing losses to the current annual sales of about 800,000 yuan, and income has also increased. The reason for the increase in income is that I encountered purchases from large companies such as Starbucks, and I also applied for Starbucks C.A.F.E. certification. The second reason is related to the increase in coffee futures prices. We have been paying attention to futures data. In recent years, the rise in coffee futures prices has also increased the overall product sales price of our coffee farmers. At present, I not only own my own coffee brand, but also set up coffee cooperatives for two to three hundred farmers around me. While planting, we also purchase fresh coffee fruits from other coffee farmers, then process them, increase added value and then sell them, and our income will continue to increase." Cai Qingkai told the First Financial Reporter.
Yu Zugui is a native of Simao. In Pu 'er Simao, almost every household has its own coffee field.Coffee planting, passed down from his fathers, seemed to be a commonplace thing for Yu Zugui's contemporaries. Yu Zugui is no exception. Having been growing coffee for more than 20 years, he was optimistic about the prospects of coffee at the beginning, and began to focus on it when Yunnan coffee first took off. During this period, Yunnan coffee faced a quality crisis of commercial beans, a sharp decline, and several changes and setbacks. Many coffee farmers around Yu Zugui gradually became depressed, and some began to cut down trees. But Yu Zugui insisted on keeping his coffee field. He thought that if he waited longer, there might be a turning point. Similar to Cai Qingkai, with the expansion of the coffee beverage market and the increase in consumers in recent years, the demand for coffee beans has increased significantly in recent years. In addition to cooperating with major brands to sell coffee beans, the continuous rise in the price of coffee futures in recent years has also brought him revenue growth.
Yu Zugui and Cai Qingkai are typical cases of coffee farmers. The pricing of Yunnan coffee has always followed coffee futures. An investor told First Financial News that when inspecting the Yunnan coffee project, one thing surprised him-coffee farmers used their mobile phones to check the New York Stock Exchange almost every day. Coffee futures market is very rare in other agricultural projects.
The surge in international futures has also driven Yunnan coffee spot prices to surge. At the end of 2024, the price of fresh coffee in Yunnan rose from 3.5 yuan to 4.3 yuan/kg to around 7 yuan/kg, reaching a record high.As coffee futures prices run at a high level, Yunnan coffee bean prices continue to rise. This year, the purchase price of coffee beans in the market once exceeded 60 yuan/kg, setting a new high, which also alleviated the difficulties faced by Yunnan coffee.
Yunnan is the main coffee-growing area in the country, and 99% of domestic coffee production comes from it. According to the "2019 Yunnan Province Coffee Industry Development Report", the coffee planting area in Yunnan Province reached 1.8315 million acres in 2014, but later due to the influence of international market prices, the area gradually decreased to 1.5673 million acres in 2019.
Just before this round of soaring coffee prices, some coffee farmers in Yunnan were still cutting down coffee trees and planting green beans and other cash crops due to low coffee prices. Wang Yihan, the owner of Xiyin Honglong Estate in Baoshan, Yunnan, told the First Financial Reporter that during the industry's trough, farmers 'income from growing coffee was only 3000 yuan/year. He once found vegetable farmers out of curiosity to understand the market. If you change to planting green beans, you can earn 10,000 yuan/year. Now, coffee futures have been rising for nearly three consecutive years, which has also significantly increased the enthusiasm of local coffee planting. According to the "2024 Yunnan Province Coffee Industry Development Report", in 2024, Yunnan's coffee planting area will be 1.1931 million acres, a year-on-year increase of 4%.
The "Comprehensive Research Report on In-depth Market Analysis and Development Planning Consulting of the Coffee Industry from 2025 to 2030" predicts that by 2030, the size of China's coffee consumption market will exceed 1.5 trillion yuan, becoming the most dynamic and complex coffee markets in the world.
It can be seen from the above data that the coffee market still has huge potential, but the degree of industry entanglement is intensifying. First Finance previously reported that Lucky's latest financial report showed that in the first half of 2025, Lucky's revenue reached 21.2 billion yuan and net profit was nearly 1.8 billion yuan. Starbucks '2025 semi-annual report shows that the company's revenue was 18.2 billion yuan, and its net profit was approximately 1.2 billion yuan. Cody Coffee, founded in 2022, has now opened more than 14000 stores.
From this perspective, the major local coffee brands that have "grown savagely" have surpassed several international coffee brands in terms of store size and revenue, and the iteration speed of new coffee products is extremely fast, which has intensified market competition. The biggest headache for coffee store operators is the price. When 9 yuan coffee fills the market, consumers are almost unwilling to pay higher prices to buy coffee drinks. This makes some coffee brands that purchase coffee bean raw materials at relatively high costs very distressed.
"The scale of my coffee shop is not large and it is not a big investment, so costs must be controlled. The price at the retail end must not be increased. Customers only want to buy the cheapest products.So now I can only reduce the purchase of imported coffee beans and switch to coffee beans from domestic origin. This way, at least the freight will be cheaper. At the same time, I also use more comprehensive beans, which can also save some costs. Otherwise, our retail prices will be difficult to bear the high costs. The continued price increase in coffee futures has obviously increased the cost for me, and I can only absorb it myself." Mr. Zhang, who has been engaged in the coffee industry for a long time, told the First Financial Reporter.
Reducing manpower and business space is also a way for coffee shops to reduce costs. First Financial reporters interviewed by many sources and learned that at present, many stores in Lucky and MANNER do not have seats and focus on a take-out model. This can not only reduce store rental expenses, but also reduce labor costs, because there is only one coffee counter. In the small shop, the front desk only needs 1 to 2 employees.
"The rise in coffee futures prices is a good thing for coffee farmers to increase their income, but it is more embarrassing for coffee retailers. Generally speaking, if raw material costs rise, retail prices should also increase. But nowadays, the competition in the industry is too fierce, and everyone is making new products and low prices in order to attract customers. This makes coffee shop operators dare not raise prices at all. On the one hand, they have to purchase high-priced and high-quality coffee beans from coffee farmers, and on the other hand, they have to cater to consumers 'needs to drink coffee at low prices. Therefore, they can only reduce labor, store space and other costs and switch to online sales in large quantities. But this will bring a new problem, that is, in the previous war on takeout subsidies, small shops will be overwhelmed by traffic and profits will still be diverted.Therefore, the price of coffee futures continues to rise, which is actually the test of the operating capabilities and financial strength of the coffee retail side." Shen Jun, a senior analyst in the retail industry, believes.
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