African Coffee's slow Journey to China

Coffee production in Africa accounts for about 13% of global production, and coffee revenue is an important source of GDP and exports in some African countries. Ethiopia's coffee exports are the largest source of foreign exchange earnings, accounting for more than 35% of the country's total foreign exchange earnings, about 25% of the national livelihood is directly or indirectly related to coffee, 4 - 5% of GDP and about 20% of tax revenue are directly derived from coffee industry.

Coffee cultivation is Ethiopia's main source of income and its output ranks second in Africa, according to Ethiopia's Andulam. Coffee is grown in 85% of households in Ethiopia, while other cash crops include flowers, sesame seeds and beans. Ethiopians grow coffee in almost every household and drink coffee every day, and coffee shops can be seen everywhere on the streets. As for the coffee price, it is also very cheap. Each kilogram of coffee costs only 80 birr (1 US dollar to 16 birr) in Ethiopia, which is 5 US dollars, about 30 yuan, and this price is only enough to buy a cup of coffee in Starbucks in China.

Excellent quality, low price is a significant symbol of African coffee, but also won a high reputation in the international community, attracting many well-known European and American buyers to purchase in Africa, including Starbucks in the United States and St. Petersburg in the United Kingdom.

Chinese people have been drinking tea for thousands of years. As the origin of tea in the world, people ignore or despise coffee more or less in consumption habits and concepts. The coffee culture of the mainland of China should have started in the British French Japanese Concession in old Shanghai, and the cafes at that time were places where foreigners and upper-class Chinese frequented, and did not enter the lives of ordinary people. Until recent years, with the impact of foreign culture and lifestyle changes, coffee more into the homes of ordinary Chinese people, China's coffee culture gradually flourished.

For China's coffee market, many analysts believe that the market is huge and has great development potential. Coffee consumption in China is growing at a staggering 15 percent a year, compared with a global average of 2 percent, according to the International Coffee Organization in London. The average Chinese drinks only three cups of coffee a year, compared with 500 to 700 cups for Americans.

With the rise of Chinese coffee culture, people began to understand African coffee slowly, and even many coffee lovers began to promote and sell it in China after tasting African coffee. However, African coffee sales in the Chinese market are still very small, and most people are still confused when it comes to African coffee.

Mr. Albert, Chief Representative of Rwanda Development Bureau China Representative Office, said that Rwanda's coffee exports to China accounted for a small proportion of its total exports. "Rwanda exports about 30,000 tons of coffee a year, but less than 1,000 tons of coffee are exported to China, which accounts for a very small proportion." "The latest figures we have are for 2008-2009," Mr. Albert said."Rwanda's coffee exports to China are about 100,000 US dollars, about 50-100 tons. In 2010, China imported a small amount of coffee, mainly well-packaged ripe beans. In 2011, there were raw beans and ripe beans imported."

Faced with China's huge emerging market, African coffee has been in a tepid, slow development stage, which is due to a variety of reasons. First of all, compared with China's traditional tea culture, China's coffee culture has a short rise time and weak influence.

Whether a city's coffee culture is strong or not can be intuitively recognized from its coffee sales. Take Beijing and Shanghai, two big cities in China, for example. Shanghai had coffee promotion in the 1930s, when coffee had already entered the Shanghai market. The cultivation of coffee culture in Shanghai has gone through more than half a century of history. Coffee culture in Beijing rose late and cultivated for a short time. When it comes to Beijing drinks, people may remember the big bowl of tea in old Beijing. Different coffee cultures in the two cities lead to completely different market sales. According to the head of a Beijing-based Ugandan coffee company, sales of Ugandan coffee in Shanghai are much larger than in Beijing, and can even double.

African countries lag behind in coffee processing and packaging, and lack of influential private brands is another reason for their slow development in China. As most African countries lag behind in coffee processing and packaging, green coffee remains the largest export of African countries. International coffee processing companies purchase coffee beans from Africa, process and package them in their own countries, and label them with their own brands. When consumers finally touch the finished coffee, it has become "Italian coffee" and "American coffee", and most people don't know where the coffee originated.

Green beans are not exactly the last resort for African coffee, and many times African countries prefer to export green beans. Albert explained: "There are two main considerations in the question of whether to import coffee beans cooked or raw. On the one hand, there is the issue of freight. Unless China imports large quantities of ripe beans from Rwanda, such as up to a container. If the import volume is small, it needs to be transported by plane, which is too expensive. Another is tariff considerations. China has set up preferential tariffs on some African goods, among which green coffee beans do not have to pay import duties when imported into China, but only pay VAT, but ripe beans are subject to import duties and VAT." Attracted by the tax policy, many enterprises are willing to export in the form of raw beans. After entering China, they are packaging and selling. "Rwanda's coffee processing industry is a promising one. At present, Rwanda's coffee industry has only simple processing such as roasting and packaging. As for instant coffee and other deep processing has not yet been achieved, nor can it meet international standards." Monsieur Albert added.

The African coffee industry does not pay enough attention to the Chinese market, or the Chinese consumer market is not enough to attract the interest of the African coffee industry. "In terms of sales, Rwandan coffee is basically in short supply, and the supply and demand contracts we sign with foreign buyers are generally five years, so there is no sales pressure. After the European debt crisis began in 2010, orders from European and American countries decreased, and we began to pay attention to the Chinese market." said M. Albert.

In addition, the poor promotion of African coffee industry in China, weak brand awareness and so on are the reasons for the slow travel of African coffee in China. With the increasingly close economic and trade relations between China and Africa in recent years, Chinese people have a deeper understanding of Africa. More and more Chinese people taste and deeply love African coffee. Many of them consciously act as African coffee propaganda ambassadors and are active in the coffee market in China and Africa.