The output of Arabica coffee beans in Yunnan has increased steadily and the quality has improved to the level of coffee beans in Central America.

Production of Yunnan Arabica beans (Arabica) has been growing steadily over the past decade. Volcafe, a prominent multinational coffee trader, has set up a sourcing and processing joint venture in Yunnan, a move that could boost exports of high-quality Chinese coffee beans. Dealers said the quality had been upgraded to a level comparable to Central American coffee beans.

Volcafe has been exporting Chinese-grown Arabica beans for use as a blend for high-quality coffee for the past decade. Volcafe will become the first international coffee trader to have a presence in China through a joint venture with Simao Arabicasm Coffee Company in Yunnan Province.

Jan Kees van der Wild, global head of commodities, said: "Chinese light Arabica beans are still relatively new to the global coffee market, but their improving quality stability is allowing them to quickly gain acceptance among global roasters."

Nestlé has been involved in coffee growing in China since the late 1980s, investing in the sector alongside the Chinese government and the United Nations Development Programme.

Starbucks has since set up a processing plant and a farmer support centre in China to provide technical assistance to farmers.

Yunnan's first coffee (better known for its tea than coffee) was planted by European missionaries in the late 19th century. However, the Chinese are drinking more instant coffee, which is usually made from lower-quality robusta beans.

China produces more than 1 million bags of Arabica coffee beans (60 kg each), almost as many as Costa Rica and about one tenth of Colombia's production, mostly for export.

European roasters have been buyers of Yunnan beans, particularly at a time of declining production in Central America, says Mark Furniss, Volcafe's Asia business development director.

Coffee bean production in Colombia has recently declined due to leaf rust, which has spurred exports of Chinese beans. "[Chinese coffee beans] have become a routine ingredient in the mix that roasters use," he says.

This demand has led to an upward trend in the price of coffee beans in China over the past few years. Coffee traders say chinese beans are now selling at a single-digit discount to the benchmark arabica price in new york, which currently stands at $1.95 a pound.