UPDATE 1-Volcafe sees brewing demand for China's coffee
(Updates with details throughout)
NEW YORK/LONDON Oct 28 (Reuters) - Volcafe, one of the world's biggest coffee merchants, has signed a joint-venture deal with China's Simao Arabicasm Coffee Co (SACCO) to export beans from China, among the first global traders to enter the fledgling market.
The Swiss-based coffee division of commodities house ED&F Man said on Tuesday it will set up local operations to export beans grown in Yunnan province, providing a new source of supply as drought and disease ravage crops in the world's main coffee growing regions.
The joint venture, Yunnan Volcafe Ltd, will focus on sourcing coffee beans from the Yunnan region, where Volcafe estimates the crop is "regularly in excess of" one million 60-kg bags. That is equivalent to Ecuador's annual output.
"Chinese mild arabica is still relatively new to the world coffee scene, but its improving consistency means it is rapidly growing in acceptance with global roasters," said Jan Kees van der Wild, global head of commodities at ED&F Man.
To be sure, China's crop is tiny when compared with top grower Brazil, which exports roughly 30 million 60-kg bags of beans a year. It also represents less than 1 percent of 2013/14 global coffee production of 145.2 million bags.
But the move reflects burgeoning interest in China, as its farmers expand beyond traditional centuries-old tea growing and the quality of their beans improves.
Yunnan grows mainly the hybrid Catimor variety of arabica beans, according to research from Shanghai-based consultancy Dezan Shira & Associates, and traders said that could appeal to commercial roasters who need bulk supplies for their blends.
The world's major merchants, including Noble Group Ltd and Louis Dreyfus, have operations in major growing regions such as Vietnam, Indonesia, Africa and South and Central America. Continuación...