Colombia is watching China as a potential market and competitor in the coffee trade, after Nestle reports that the Asian giant could become the world’s second-biggest consumer of the bean.
Andres Valencia, the chief commercial officer for the Colombian Federation of Coffee Growers, told Colombia Reports, “We are exporting to China not only green beans but also instant coffee, 100% instant coffee, which is very expensive.” Colombia is the largest producer of (less acidic, less ) beans in the world.
White-collar Chinese are reported to be taking up coffee drinking (particularly instant coffee) for a taste of life in the West, and some analysts say China has the potential to become the world’s second largest consumer of coffee behind the United States.
Colombia exported 3,160 bags weighing 132 pounds to China in 2010, according to the coffee official.
Valencia said, however, that “The majority of the beans that are consumed in China come from Vietnam,” which is the biggest bean producing country today. The bean is a low quality, highly variety that Colombia does not produce.
Colombia’s total production, according to Valencia, is historically around 10 million bags (660,000 tons) annually but with the past two crops damaged by the rainy season, the country has averaged about 7.5 million bags (495,000 tons) per year.
According to the Asia Times, China is not only a growing coffee consumer, but has potential to produce large quantities of the product as well.
Stuart Eunson of Beijing and Shanghai-based coffee company, Arabica Coffee Roasters, told the Asia Times that the Yunnan province in the southwest of China now accounts for 95% of China’s coffee production. The province, mostly known for rice growing, has around 56,800 acres (23,000 hectares) of coffee.
“Yunnan’s climate, elevation and general geography make growing conditions comparable to those in Colombia and Indonesia, currently the world’s third- and fifth-largest coffee producers,” Stuart Eunson reported to the Asia Times.
An estimated 60% of coffee from Yunnan is exported to countries like Japan and Germany according to the report.
The government of Yunnan plans to invest $453 million (3 billion yuan) to expand green bean production from 38,000 to 200,000 tons by 2020, according to a Starbucks corporation press release obtained by Reuters.
When Colombia Reports asked Andres Valencia about any potential threat this may cause to Colombia’s coffee export he responded, “We know that coffee production [in China] has been increased from the 1990s until today but that increase has not been very dynamic.”
“If you want to produce 11 million bags, that’s around 700,000 tons of coffee … you need around 900,000 hectares (2,223,948 acres). So if China wants to produce the same amount of coffee and considering the levels of productivity equal to Colombia, I guess China would need the same, 900,000 hectares,” said Valencia.
The Colombian Federation of Coffee Growers said it didn’t know of Chinese plans to promote the crop, but Valencia questioned whether it is a good decision for China to promote high quantity cultivation when they only have 500,000 bags (33,000 tons) consumed domestically and the arabica market is already being tended to by countries such as Colombia, Brazil and Central America.
Andres Valencia told Colombia Reports that in 2010 Colombia exported 1.4 million bags, and 270,000 bags to China’s neighbors, Japan and Korea respectively. These countries followed by Australia are the largest importers of Colombian arabica in Asia.