Coffee production increases in China

Coffee production has been increasing in China, but imports of the product tend to grow over the coming years.
When we talk about China, eyes grow in the production chain of coffee in Brazil. Natural. Exporters and commodity industries know that the potential for increased consumption of the product in the Asian country is great, and nobody wants to miss this train. In 2012, there were just over 1 million bags of 60 pounds, or just 25 grams per capita, but projections indicate that consumption could reach 3 million bags by 2020, a growth rate unparalleled in the world - and that will have to rely on the Brazilian participation to be serviced.
It is clear that the confirmation of this scenario will depend on Chinese economic power, as the warning from the International Coffee Organization (ICO), and cultural changes necessary in a country more adept to tea. But the echoes of the transformations that have made Japan a major consumer reinforce the expectation that China could indeed establish a new logic in the world market. And that Brazil will benefit from it.
In a recent study, ICO notes that in the past, a significant expansion of coffee consumption in Japan was considered "unthinkable". But Japanese imports of green coffee, which totalled 667 sacks in 1950, reached an average of 643,470 bags per year during the 1960s, to 1.9 million bags in 1970 and currently revolve around 7 million bags annually. In the list of the largest consumers in the world, the country looses only to the United States, Brazil and Germany.
Even without being a millennial coffee growing Chinese already have story to tell. Was introduced in the Yunnan Province by a French missionary around 1887, but remained almost like a small island until the 1960s, when the government allocated an area of 4000 hectares in the region for the cultivation of Arabica beans. Until the late 1970s, however, less than 7% of the reserved area was cultivated. At the end of the next decade, however, a joint project of Beijing and the United Nations Program for Development (UNDP) gave further impetus to the development of production.
Later, big companies like Nestlé began to encourage the coffee trade in China, mainly in Yunnan. The average production between 1998 and 2012 was 370 million bags per year, with an average annual growth of 15.1%. It is estimated that 748,000 bags were produced in 2012, compared to 104,000 in 1998. But imports, which virtually did not exist until 25 years ago, also began to grow. From 1998 to 2012, the average annual imports (green and roasted beans) was 533,000 bags, with an annual growth of 13.7%. In 2012, the volume reached 1.4 million bags.
Over the past 14 years, the average growth rate of Chinese imports of green coffee was 15% per year. During the period, the share of imports of roasted coffee, which was 6.5% of the total in 1998, reached 12.2%. In the same comparison, the share of soluble decreased from 33% to 19.1%. But this decline is considered normal. Is associated with the actual development of Chinese industry roasting, which received investment from multinationals eyeing the strong demand.
For Brazil, the time is ripe to try to ensure a good space in the Chinese market. This is because the increasing imports from China are still concentrated in Robusta, lower quality. Not coincidentally, nearly 50% of the country's imports originate in Vietnam, which also offers an obvious advantage in trade logistics. Largest producer of Arabica coffee in the world, Brazil is only the fourth largest source of Chinese imports of coffee.
If the optimistic scenario is confirmed and the consumption of the country reach 3 million bags in 2020 - the Brazilian consultancy P&A International Marketing works with this calculation, near the ICO number of 2.8 million bags - the expectation is that Arabica sales conquer space and Brazilian shipments increase at even higher proportion in line with the market matures.
P&A caveat that any study on China hindered by a lack of reliable statistics. Anyway, Carlos Brando, managing partner of consulting, says that the focus must be focused on country's middle class - consisting of between 300 million and 400 million people - and not the total population that exceeds 1 billion people.
There are several "Chinas", and not all afford to consume coffee or will have by 2020. But you already know the target audience. In large centres, coffee shops where they begin to multiply are frequented by relatively small groups of middle class, corporate and advertising segment is directed especially to younger, more receptive to change and the Western lifestyle. We need to plant, but the harvest promises.
Source: Revista Cafeicultura