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Working as a tour guide in China, Yunnan was the destination that tourists and staff looked forward to visiting the most. I suppose that Yunnan’s capital being dubbed “The City of Eternal Spring” made it an easier sell. The province is considered one of the most diverse in the country. It contains about half of the recognized plant species in the nation, and 25 of the 56 ethnic minorities reside in the province. Kunming, (the aforementioned “City of Eternal Spring”) was given this name due to its temperate climate and stunning biodiversity; it’s no surprise that Yunnan now produces the vast majority of China’s coffee.

The emergence of Yunnan’s coffee production can be attributed in a large part to Nestle. The company first entered the country in the late 1980s, and has provided both financial resources and technical expertise to assist farmers. The company deserves credit for giving many in the region the tools to improve production and farm sustainably. Other big multinational players have made investments in farms and processing facilities in the region through joint ventures . When my colleague Max and I visited in 2013, we were hoping to find farmers interested in producing specialty coffee and see what possibilities there were for the future.

Farmers told us that Nestle was one of the few large buyers in the local market, and that they would typically purchase twice a week using a set price based on the New York Coffee C Arabica contract from that day. While Nestle had done an incredible amount to improve farming practices in the region, most of the coffee they were buying was used for instant Nescafe, meaning there was a limit to what they were willing to pay for coffee. The question for farmers now is whether they can produce better coffee that will fetch a higher price outside the local market, and if the investment is worth their while. The resources required for better farming, picking, and processing are significant, and without a strong market for Chinese specialty coffee they risk having to sell at commercial prices.

Furthermore, producing lower grade coffee can be less attractive than planting other crops. Some in Yunnan told us that banana companies plant the trees on behalf of the farmer, and despite being much less profitable, banana farming carries less risk than growing coffee. On top of these barriers, the highest altitude areas in the Yunnan Mountains tend to be too harsh for coffee cultivation. Most of the coffees we tasted while in Yunnan were washed Catimors; sweet, clean, with medium to light body. Solid coffees, but not exhibiting the kind of character that most roasters would look for in a single origin offering. We left with some optimism about the overall interest in producing specialty, but without seeing anything remarkable on the cupping table.

Recently, some Royal colleagues and I had a couple opportunities to taste some Yunnan coffees and see the sort of development that has been taking place in the region since our last visit.

The first opportunity was an event I attended (along with a few colleagues) at CoRo, hosted by Esther Shaw. Esther has for the past few years been conducting SCAA trainings in Yunnan as well as developing relationships with farmers in the region with an eye towards producing specialty coffees. The event was meant not only to showcase some of what Yunnan has to offer but also to introduce roasters to China as an up and coming coffee growing origin. Frankly, I was pleasantly surprised by some of the coffees showcased at the event. While not every coffee was a standout, there were a few on the table that had quite a bit more character than the typical washed Catimors that I had sampled on my trip to the region a few years back.

Two weeks ago we also were visited by members of the Yunnan Coffee Exchange (YCE), accompanied by a representative of the Coffee Quality Institute. The YCE recently helped organize the 2016 Best of Yunnan Green Coffee Competition and Auction in Shanghai and Pu-’er, with the winning lot fetching over USD $100 per pound. Beyond the auction, the YCE has ambitious plans to increase investment in processing and warehousing infrastructure along with the growing production in the region. What intrigued me the most in our conversations with the YCE representatives was their desire to make Yunnan a hub not only for higher quality coffee in China but have it encompass surrounding Southeast Asian producing countries.

Investing in infrastructure to help farmers in places like Laos and Thailand produce higher quality Arabica could do a great deal to raise living standards – if that investment can translate into higher quality coffee. One of the biggest hurdles for marketing coffees from these regions will be to separate these new efforts from the Robusta production that dominates their export markets. Overcoming that stigma will be the first step in having specialty roasters in the US and other markets abroad take chances on investing in quality from lesser known origins.