Beverages News
- Coffee gains foothold on Chinese mainland
Date: 23-May-2007 Sources: (Shenzhen Daily)
DU YANSHENG, a farmer on the southern Chinese island of Hainan, hasn't gone without his morning cup of coffee in five decades, not even during the 'Cultural Revolution?- when such 'mock-Western?practices could have landed him in prison.
'People here have never stopped drinking coffee,'Du told reporters in Xinglong, the cradle of coffee culture in an otherwise tea-drinking country.
Du's father was one of China's first coffee farmers, at a time when it was considered an exotic foreign beverage. He brought robusta beans from Indonesia in the 1950s - decades before Nestle or Starbucks Corp. arrived on China's shores.
Today, coffee is fast catching on, especially among younger urban Chinese, and the percentage increase in demand is in the double digits - though still less than one-tenth of tea consumption.
And coffee grown in China is beginning to climb the quality ladder. Arabica from Yunnan Province is now catching the eye even of specialty roasters such as Starbucks or Italy's Illy.
'Demand for Yunnan arabica is expanding,'said Tomonori Hashimoto, a trader from S. Ishimitsu Co. Ltd. in Japan, one of the world's top coffee consumers, and known for being picky.
Official data showed Chinese coffee exports jumped 40.8 percent to 6,484 tons during the first quarter of this year, with more than 4,000 tons headed for Germany and Japan.
It imported 4,642 tons in the first quarter, down 5.7 percent year on year.
'When we began a coffee business here in 1998, our monthly sales were about 10 kilos. Now our sales are calculated in tons,'said Zhou Zhihua, a coffee trader based in Yunnan's provincial capital, Kunming.
To be sure, the industry officials say Chinese production is still too small for some roasters to pay much attention, especially as growing domestic demand is absorbing a large chunk of it.
China has no official data for coffee production. Industry officials estimate it harvests 22,000 to 28,000 tons of arabica per year in Yunnan.
That is tiny compared with some 900,000 tons grown in Vietnam, the world's No. 2 producer, or 400,000 tons in Indonesia. And there's little scope for production increases because farmers remain keener on growing rice, rubber or other higher-priced cash crops.
Data from the International Coffee Organization showed that average coffee prices had risen about 7 percent in 2006 from the year before. That's while prices for other commodities more than doubled partly due to strong demand from China. And Yunnan arabica has not yet reached the rank of Indonesia's Mandehling - regarded by many as Asia's best - though its quality has improved, officials said, with technical assistance from Nestle and others since the early 1990s.
When grown and processed properly, Chinese coffees have a light to medium body and acidity, similar to a wet-processed South American coffee, Roast Magazine quoted Stuart Eunson from Arabica Coffee Roasters (Beijing) Co. Ltd. as saying.
So far, its best market is at home.
Industry officials estimated Chinese coffee consumption was growing at double digits, with some putting the 2006 demand as high as 45,000 tons.
Starbucks or Illy are now looking at Yunnan arabica mainly for use in China, because they are expanding their outlets in the country and import tariffs stand as high as 20 to 60 percent.
'You will find a bottle of instant coffee almost in every family nowadays. People even like to send coffee as gifts,'said Zou Lei, vice chairman of the China Coffee Association.
Roasters are eyeing the 250 million Chinese people living in cities and coastal regions as their next market, just below the U.S. population of 300 million.
But coffee still has some distance to go before supplanting tea in Chinese homes: China consumes 700,000 tons of tea per year.
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