The spot trading volume of coffee on the Chongqing Coffee Exchange hit 10 billion yuan (1.5 billion U.S. dollars) as of August, making it the biggest spot trading platform for coffee in China. According to Peng De, general director of the Chongqing Coffee Exchange, China’s coffee consumption has been growing by 20 percent every year and the size of the coffee market is expected to reach 600 billion yuan in 2020…Full Article: ECNS.cn Oct 2017

Key Point

  • The Chongqing Coffee Exchange hopes to become the world’s third largest coffee trading market after those in New York [i.e. Coffee, Sugar and Cocoa Exchange or CSCE] and London.  Chongqing has already signed cooperation agreements with approximately 200 domestic and foreign enterprises.

ChinaAg Comments

  • In April 2017, according to the manager of the Chongqing Coffee Exchange, approximately 60% of Yunnan Province’s coffee production is exported abroad and used as low value-added raw beans. In addition, since its launch in June 2016, the cumulative transaction volume of coffee products on a corresponding e-platform totaled more than CNY 5.2 billion yuan (750 million U.S. dollars).
  • In November 2016, it was reported that Yunnan Province produces 130,000 MTs of coffee annually on 120,000 hectares of land, accounting for 99% of China’s total coffee output. During the same month, it was announced that China’s largest instant-coffee factory was being built in Chongqing Municipality. The factory (expected to be completed in 2018) will have an annual production capacity of 10,000 MTs of freeze-dried coffee, 3,000 MTs of roasted/baked coffee beans, and 2,000 MTs of liquid coffee concentrate.
  • In June 2016, the Chongqing Coffee Exchange was established. According to a representative of Dehong Hogood (Yunnan-based coffee producer) quoted in December 2015, the exchange’s spot transactions will total somewhere between 100,000 MTs and 200,000 MTs in 2016. Dehong Hogood reportedly accounts for roughly 50% of China’s coffee exports.
  • 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.
  • In March 2015, Nestle China destroyed tons of instant coffee in its Dongguan, Guangdong province, factory due to poor demand. During the same month, construction on the Nescafé Coffee Center (NCC) began and was expected to be completed by October 2015.
  • In 2013, Yunnan Province produced almost 100,000 MTs of coffee or approximately 98% of China’s total output. 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 2012, China produced approximately 70,000 MTs of green (raw) coffee.
  • In 2011, the Chongqing-Germany intercontinental railway began operations. As of June 2016, 45% of all exports shipped by rail were loaded at Chongqing.
  • Chinese coffee cultivation takes place in Yunnan (primary grower), Hainan Island, Fujian, and Guangxi Zhuang Region, while instant coffee production is centered in Guangdong Province. In 2009, Guangdong province halted coffee production, while Hainan Island produces ~440 MTs annually. From 1998 to 2015, Chinese coffee imports increased from 13,900 MTs to 59,200 MTs.

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