Luckin Coffee strengthens Brazil trade with $1.38bn coffee supply deal

Luckin Coffee and ApexBrasil officials after signing the new deal | Photo credit: Luckin Coffee

Luckin Coffee has agreed to purchase four million 60kg bags of coffee from Brazil between 2025 and 2029 – its second supply deal with the world’s largest coffee producing country within the last six months. 
 

The agreement strengthens the relationship between Beijing-based Luckin Coffee and the Brazilian Trade and Investment Promotion Agency (ApexBrasil) and demonstrates the growing importance of the Chinese market for Brazilian coffee exports.  

Following the rapid development of China’s branded coffee shop market since the pandemic, Brazilian green coffee exports to China reached a record of over 1.3 million 60kg bags in 2023, according to Brazil’s Ministry of Development, Industry, Trade and Services. Equivalent to $280m in value, the increase made China the sixth-largest market for Brazilian coffee bean exports globally. 

“The purchase intent agreement by Luckin Coffee of 240,000 tons (four million bags) demonstrates the expansion of the Chinese market for Brazilian coffees,” said Márcio Ferreira, President, The Brazilian Coffee Exporters Council (Cecafé).   

In June 2024, Luckin Coffee agreed to buy 120,000 tons of Brazilian coffee over a two-year period for $500m. The new deal will the see the 21,000-store coffee chain purchase an additional 120,000 tons of coffee, in a deal valued at RMB 10bn ($1.38bn). This marks Luckin Coffee’s largest coffee bean procurement plan to date.

“Our goal is to make premium, delicious Brazilian coffee renowned worldwide, and this partnership has significantly advanced the economic and social development of both countries,” said Jinyi Guo, CEO, Luckin Coffee.

Unlike the previous agreement which covered only arabica coffee, the new deal includes the supply of robusta coffee. Robusta coffee is in high demand due to a 10% production decline in Vietnam, the world’s largest producer of the variety, amid high temperatures and severe droughts. 

Brazil exported seven million 60kg bags of robusta coffee during the first nine months of 2024 – a 170% increase on the same period in 2023. 

“The Chinese were buying coffee from Vietnam, which started having problems with the climate. For Brazil, which produces a third of the world’s coffee, to enter China opens up a huge horizon and very good prospects for coffee producers,” said Jorge Viana, President, ApexBrasil. 

The deal was signed as part of the visit of China’s President Xi Jinping to Brazil for the G20 summit. In total, Brazil and China struck 37 cooperation agreements during the summit in the fields of trade, agriculture, science and technology, communications, health, energy, education, culture and tourism.