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What has Japan got to do with China’s coffee trade?

While many individuals may consider countries like Brazil, Colombia and Costa Rica to be the key players in coffee trading, other nations like China and India, for example, are well worth people's attention.

The reason for China being one to keep an eye on actually depends heavily on what has been going on in Japan. This is because China has now overtaken its neighbour to become the world's second largest economy after the US – and it is these emerging economies that really merit consideration.

Interestingly, the majority of people may consider China to be far more of a tea-drinking nation and they wouldn't be entirely wrong. However, the same could have been said about Japan, but the fact of the matter is that the figures tell a very different story.

In 1950, imports of green coffee to Japan totalled around 667 bags. Over the 1960s, this grew to an average of 643,470 and 1.9 million in the 1970s. Now, figures published by the International Coffee Organization suggest that the country now imports an average of 7.1 million bags of green coffee every single year. This has made Japan the fourth largest consumer of the product behind only the US, Brazil and Germany. 

If this is what has been going on in Japan – and if there is even the slightest possible chance that China may follow suit – then this is why coffee traders should keep a very close eye indeed on consumer behaviours there too.

From 1998 to 2012, the bulk of the country's imports came from Vietnam (47.8 per cent of total volumes), Indonesia (12.4 per cent), the US (7.7 per cent), Brazil (6.3 per cent), Malaysia (4.1 per cent) and Colombia (3.8 per cent).

The fact of the matter is, the figures for production (as opposed to importing) also suggest that China is becoming increasingly interested in coffee.

From 1998 to 2012, the average yearly production was around 370,000 bags of green coffee. However, the average figure for 2012 is said to be about 748,000, while in 1998 it was 104,000. Rather, the production has not been steady – the country is producing coffee in ever-increasing quantities. An average annual approximation for 1998 to 2012 is therefore misleading.

An annual average production growth rate of 15.1 per cent – as is the case in this instance – suggests that China is well worth coffee traders' time and attention.

Yunnan, Hainan and Fujian are the names that traders should be looking out for. These are the main coffee-producing regions in China, with the Yunnan province in south-west China producing mainly Catimor Arabicas and accounting for over 95 per cent of overall production in the country. The producing areas of Yunnan are called Kunming, Simao, Ruili and Baoshan.

Hainan, an island in south China, and Fujian in the south-east both focus more on Robusta varieties and – as the figure above would suggest – are responsible for less than five per cent of national production.

If Japan is anything to go by, perhaps coffee traders will be hearing far more about these places over the coming years.