China: the silent coffee giant
The real reason why the price of green coffee will rise that no one is talking about. Why China coffee market is a major factor of the rise of green coffee price
COFFEE MARKET
If there’s one thing I’ve learned in over 20 years in the coffee industry, it’s that change is inevitable. But the kind of change we’re witnessing today? It’s monumental, and it’s reshaping the industry from the ground up.
Let’s start with the facts.
Last week, we saw historic price surges for both Arabica and Robusta coffee:
• Arabica futures in New York hit $7.10/kg, a level not seen since 1977.
• Robusta futures in London reached $5.40/kg, an all-time high.
Meanwhile, in another corner of the globe, a different kind of wave is building. Luckin Coffee, a Chinese coffee titan, has announced its intention to purchase 4 million 60-kg bags of green coffee from Brazil between 2025 and 2029. That’s 2% of Brazil’s total export capacity over five years, consumed by a single company.
Now, let that sink in: just one company is staking its claim on 2% of Brazil’s exports, and this is only the beginning of China’s entry into global coffee demand.
If you think that’s a blip on the radar, I urge you to think again.
Connecting the dots: what these changes really mean
The global coffee industry is standing at a crossroads. To understand where we’re headed, we need to break down the forces shaping this new reality:
1. demand is exploding
Coffee consumption is growing, particularly in regions like Asia, the Middle East, and Africa. China, in particular, is becoming a juggernaut. What was once a tea-drinking nation is rapidly developing a taste for coffee—driven by urbanization, a growing middle class, and cultural shifts towards Western lifestyles.
While current per-capita coffee consumption in China remains relatively low, the sheer size of its population means that even modest increases in consumption have an outsized impact on global demand. Luckin Coffee’s deal with Brazil is just one example of how this demand is translating into real-world shifts.
2. supply is under pressure
On the other side of the equation, supply is struggling to keep up. Climate change is wreaking havoc on traditional coffee-growing regions, reducing yields and threatening the viability of entire harvests. Regulatory pressures, labor shortages, and rising production costs are compounding the problem.
The result? A tightening supply chain, with less coffee available to meet a growing global appetite.
3. prices are climbing—and not coming down anytime soon
We’ve all seen price fluctuations before, but what’s happening now feels different. With demand outpacing supply, prices are reaching new heights—and these increases are unlikely to be temporary. Add in speculative trading in the financial markets, and the stage is set for continued volatility.
For those of us in the coffee industry, this means we’re entering uncharted territory. The $7/kg Arabica price we’re seeing today could easily become $10 or $15 in the not-so-distant future.
US Coffee C Futures - Mar 25 (KCH5) - Source: investing.com
A brewing storm—or a golden opportunity?
At first glance, these changes might seem like bad news. Rising prices, shrinking supply, and growing competition—it’s enough to make anyone feel overwhelmed. But let me offer a different perspective.
Change, while challenging, is also an opportunity. The coffee industry is evolving, and those who embrace this evolution will find ways to thrive.
Here are three ways you can turn this brewing storm into a golden opportunity:
1. reassess your value proposition
In a world where coffee prices are skyrocketing, offering “just good coffee” isn’t enough. Consumers are looking for more—they want an experience, a story, a connection to the product they’re buying.
Ask yourself: what sets your business apart? How can you create a deeper connection with your customers? Whether it’s through storytelling, exceptional customer service, or innovative product offerings, now is the time to double down on what makes your brand unique.
2. educate your customers
One of the biggest challenges we face as an industry is helping consumers understand why prices are rising. Transparency is key. By educating your customers about the realities of the coffee market—climate change, supply chain pressures, and growing global demand—you can build trust and loyalty.
Take this as an opportunity to highlight the quality and sustainability of your offerings. Show your customers that higher prices aren’t just about costs—they’re about ensuring a better future for everyone in the supply chain.
3. diversify your offer
Rising green coffee prices don’t have to mean shrinking margins. By diversifying your product and service offerings, you can create revenue streams that are less dependent on raw coffee costs. Think beyond the cup: merchandise, subscriptions, classes, or even unique collaborations with local artisans.
Why now is the time for bold decisions
The world of coffee is changing rapidly, and sitting on the sidelines is not an option. Adapting to these changes requires courage, creativity, and a willingness to think differently about your business.
Yes, the challenges are real—but so are the opportunities. The choices you make today will determine whether you’re able to thrive in this new reality or whether you’ll be left playing catch-up.
London Robusta Coffee Futures - Jan 25 (RCF5)
The chinese factor: the game-changer we can’t ignore
Luckin Coffee’s deal with Brazil is more than just a headline—it’s a glimpse into the future. As China’s coffee culture matures, we can expect to see more deals like this, more investments in coffee-growing regions, and a larger share of the global coffee supply being funneled towards Chinese consumers.
There’s even evidence that China is eyeing Africa as a long-term solution to its growing demand. The country has already made significant investments in African agriculture, and coffee could be next.
What does this mean for the rest of us? It means competition for high-quality green coffee is about to get fiercer. Producers, roasters, and distributors who fail to adapt to this new reality risk being left behind.
Source: Wikipedia.orgLuckin Coffee Kunming store