Friday, 10 August 2012

Coffee craze in China’s tea city

Pu’er city, named after legendary dark tea, sees boom in more lucrative coffee trade

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Guanyu 道 said...

Coffee craze in China’s tea city

Pu’er city, named after legendary dark tea, sees boom in more lucrative coffee trade

By Kor Kian Beng
29 July 2012

Order Pu’er and you would expect to be served the fragrant dark tea that even emperors craved.

This could change, if the name becomes synonymous with coffee as well.

A coffee-growing craze has spread in this cosy and hilly Chinese city named after the legendary tea, while interest in the prized tea leaves has been cooling.

Yearly coffee production here doubled to 27,700 tonnes between 2008 and last year, while tea farming grew at a slower 51.7 per cent to reach 65,100 tonnes over the same period.

‘It has been nothing short of a coffee rush here in the past few years,’ said Mr Wouter De Smet, who has been based in Pu’er since 2005 as a coffee expert for Swiss food giant Nestle.

The boom is almost sacrilegious in a town that loves its tea reputation so much that it shed its old name Simao to take on the new one in 2007.

But its local farmers found it hard to quibble with the more lucrative coffee trade.

Coffee beans fetch about 22 to 26 yuan (S$4 to S$5) per kg, compared with 20 yuan per kg of tea leaves - a market which collapsed in 2007 after nearly a decade of sky-high prices due to over-speculation.

Farmers also need less land to grow the beans. A hectare can produce about 6.7 tonnes, compared with about 2.7 tonnes of tea leaves.

It means growing coffee is at least twice as profitable as growing tea, said locals.

Land usage is testament to that. While farmland for tea plantations is still more than three times that of coffee here, the latter has expanded by 150 per cent compared with tea’s 12.2 per cent between 2008 and last year.

Pu’er coffee - of the Arabica family - has been able to command high and stable prices because of a strong global demand for its good quality.

Mr Lee Sirong, 50, who heads local coffee giant Ai Ni’s production department, explains that the city’s location near the Tropic of Cancer, which together with the Tropic of Capricorn form a coffee-growing belt around the globe, makes it a suitable coffee base.

He added: ‘Pu’er also has many hills at altitudes of around 1,000m, which is ideal for coffee-growing. The gods have blessed the city to grow good coffee.’

That is why Pu’er is China’s biggest coffee-churning base, accounting for more than half of Yunnan’s 53,000 tonnes total load, of which about 60 per cent are exported.

Almost all of China’s coffee beans are produced in Yunnan, with Hainan island producing around 500 tonnes yearly.

But China remains a small coffee-producing nation, accounting for around 0.6 per cent of the eight million tonnes produced worldwide.

For Pu’er, it helps to have Nestle on its side too. In 2002, the Swiss company moved its Kunming procurement base to Pu’er. It has also been providing free training to farmers here to improve the quality of beans.

Nestle bought 10,500 tonnes of coffee beans from Pu’er for its coffee products in China and worldwide when the season closed earlier this year, said Mr De Smet.

This accounted for slightly over 1 per cent of the conglomerate’s total global coffee bean purchases of about 800,000 tonnes.

The coffee boom has raised locals’ incomes in Pu’er. Farmers have been building houses and buying cars.

Coffee profits of 80,000 yuan yearly allowed Mr Chen Jiahua, for instance, to spend 160,000 yuan in 2008 to add a two-storey wing to his house.

‘All thanks to coffee money!’ quipped the 50-year-old.

Another farmer Ai Bang, 40, said he prefers coffee-growing as it is physically less taxing. Harvesting takes three months, half the time needed to pick tea leaves.

But despite its rising popularity, coffee still has a long way to go in the city.

Tea remains supreme, in terms of its production load and land usage here.

There is also no coffee-drinking culture among the city’s 2.5 million population. There are fewer than 10 cafes here, compared with thousands of tea shops.

Guanyu 道 said...

It explains why the tea fraternity is unfazed by the rise of the coffee rival.

Madam Wang Meinan, 47, who owns a tea plantation and also a wholesale store in the city’s downtown area, believes her key threat is not coffee, but her fellow tea-producing competitors.

‘If more turn to growing coffee, it could help my business as that would mean fewer rivals in the tea industry,’ she added.