BEIJING ? Students and tourists will help keep China's coffee consumption moving toward a 20 percent annual growth rate, according to industry analysts.
Participants at the Beijing International Coffee Fair last week said that China remains ?a frontier for high-end coffee sales, with domestic and international firms looking at major expansion despite roadblocks such as high taxes,? writes Reuters.
The news source notes that Starbucks said it plans to more than triple its locations in Mainland China, from 450 to 1,500 by 2015, and that bean traders are taking note.
"With more and more Chinese students returning from abroad, China's coffee (consumption) will improve a lot in five years," Yang Ke, general manager of coffee trader Shanghai Walton Concepts Economic & Trading Co., told the news source.
China, meanwhile, has room to catch up in terms of coffee consumption.
?China's average coffee consumption is 3 cups per person per year, while the world's average is 240 cups, thus there is much room to improve it,? Ji Ming, chief of the Beijing Coffee Industry Association, told the news source.
To help boost domestic output, Starbucks said it would work with farmers in the Yunnan province. However, Fu Jingya, a deputy secretary general of Coffee Branch under China Fruit Marketing Association, told the news source that financing is an issue.
Growth for high-end outlets also remains a challenge in China, thanks to high coffee import taxes, where Chinese buyers pay an 8 percent to 30 percent tariff for coffee imports for raw beans and a 17 percent value-added tax.
Yang Ke of Shanghai Walton told the news source that for a coffee shop that sells 1,000 cups of coffee per day, sourcing for quality beans at competitive prices is a major hurdle for expansion.
?The stable development of the coffee industry needs the support of favorable trading conditions, otherwise high prices will curb consumption and hurt quality," Yu Peng, the general manager with Feel Cafe in the port city of Dalian, told Reuters.
For more on commodity prices, read ?Raw Deal? in the upcoming July issue of NACS Magazine.
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