Understanding the market is vital for traders within any sector – who is importing what, from where, why, how often, what volumes are traders exporting, to whom and when? The questions are endless. But what about China? Who is importing its coffee and what are they interested in?
Figures published by the International Coffee Organization reveal that total coffee exports from China from 1998 to 2012 averaged around 369,000 bags a year. However, a figure such as this can prove misleading as it suggests that volumes were stable, when all other indicators hint at a steady growth.
Rather, the volume of exports in 1998 was actually around 137,000 bags, while in 2012 this had increased to around 1.1 million.
However, these figures take into account three different kinds of coffee – green, soluble and roasted.
Now, green coffee has proved to be a key driver for China's coffee trade. Exports of this kind boosted from 33,000 bags in 1998 to 985,000 bags in 2012, giving it a share of total exports of 91.8 per cent.
The significance is that this figure was just 23.9 per cent in 1998, suggesting that foreign importers have been paying an increasing amount of interest in China's green coffee over the last 15 years.
Roasted coffee exports returned an average of around 11,000 bags a year (again, taking into account the fact that this figure may too be slightly misleading as a static average) totalling 2.8 per cent of overall exports. This in turn means its share fell to 3.6 per cent in 2012 from 8.9 per cent in 1998.
Soluble coffee meanwhile averaged 38,000 bags per year across this period. However, this variety too showed a decline of 67.2 per cent of exports in 1998 to 4.6 per cent in 2012 (despite averaging 10.2 per cent of total exports across the period).
Are, then, importers becoming increasingly interested in green coffee as opposed to soluble and roasted varieties? These figures would suggest so.
But who are the main importers of coffee from China whose behaviours (or tastes, rather) appear to be changing?
According to official figures, more than 97 per cent of the country's exports are destined for one of twenty different countries.
As far as green coffee is concerned, official figures for the period 1998 to 2012 show that Germany was by far China's most loyal customer, importing an annual average of 135,000 bags (42.1 per cent of total exports). Although, again, this figures takes into account that trade will have been far slower earlier on in this time frame.
Japan (13.1 per cent), Belgium (9.3 per cent), the US (7.6 per cent) and Saudi Arabia (4.5 per cent) also imported a considerable quantity of green coffee from China.
Understanding who is importing what and why is ultimately what helps traders to make predictions about – and therefore decisions based on – the state of the market. Will green coffee continue to expand the market in China at such a rate? Only time will tell.
