An upcoming spot trading center in Chongqing will provide the much-needed impetus for the coffee industry in China to gain global traction along with a boost from the Belt and Road Initiative. Yunnan-based coffee producer Dehong Hogood Coffee Co Ltd, the company that is setting up the center, said the center will boost trade with countries on the Silk Road Economic Belt and the 21st Century Maritime Silk Road. Li Xiaoling, general manager of Chongqing Energy International (Hong Kong) Co Ltd, the second-largest shareholder of Hogood Coffee, said: “We are hopeful of setting up the center by the end of this year. We expect spot transactions of coffee at the center to range from 100,000 tons to 200,000 tons in 2016.”…Full Article: China Daily Dec 2015

Key Points

  • In July 2015, Dehong Hogood began exporting coffee via the Chongqing-Xinjiang-Europe railway link (Chongqing – Lanzhou, Gansu province – Urumqi, Xinjiang region – Alataw Pass – Kazakhstan – Russia – Belarus – Poland – Duisburg, Germany). The rail journey takes 14 days, saving the coffee company 30 to 35 days when compared to its old export (sea) route via Guangzhou, Guangdong province.

ChinaAg Comments

  • Yunnan province has three main coffee growing regions, with Dehong (bordering Burma) and Pu’er (bordering Burma, Laos, and Vietnam) being the most developed. Dehong Hogood Coffee Company is the primary buyer of Dehong coffee while Switzerland’s Nestle is a major purchaser of Pu’er beans (south of Dehong).
  • In 2013, Yunnan Province produced almost 100,000 MTs of coffee or approximately 98% of China’s total output.
  • In 2012, China produced approximately 70,000 MTs of green (raw) coffee.
  • Coffee production in China is focused on Yunnan province, which accounted for more than 90% of China’s output in 2012. In 2009, Guangdong province halted coffee production, while Hainan Island produces ~440 MTs annually.
  • Established in 2007 in Yunnan province, Dehong Hogood‘s coffee plantations total 6,667 hectares, comprising approximately one-third of the coffee planting area in China. Hogood produces 30,000 metric tons of coffee berries (primarily Arabica coffee) annually, most of which is exported to Europe and Korea. The company also produces and sells roasted coffee, including whole bean, ground coffee in bags for exporting and instant coffee in fractional bags for retail.

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