BY BAO SHENG YU
In November 2019,I for the first time met Andrew Rugasira,a Uganda veteran coffee entrepreneur,who elaborated Uganda coffee and China coffee.I was surprised at the unaware fact that China is also a coffee producer,but Mr Rugasira’s introduction aroused my interest in Uganda coffee .During the past 3 years since then,I developed a habit of drinking ground coffee,rather than instant coffee that I used to and I have visited the coffee farmers in Kasese,Mbale,Mpigi,Masaka,Arua etc and some coffee roasters in Kampala.
Coffee Quantity of Uganda and China from October,2021 to March,2022(Unit: KG)
From the bar graph above,we can see in March 2022,Uganda exported 28,680,420 kg ‘s coffee beans while China produced only 10,100 kg ’s coffee green beans. There is a huge contrast between Uganda’s quantity and China’s quantity,which defines that Uganda is a main coffee exporter,while China is a coffee importer.
99% of China’s 10,100 kg in March was produced in Yunnan’s province,which is bordered to the south by Vietnam,Laos and Myanmar.Coffee is mainly grown in Yunnan’s Pu’er District,Bao Shan District,De Hong District and Lin Cang District as shown in the following pie graph.
Production Percentage in Yunnan’s four districts in March 2022
Average price of Yunnan’s Coffee Green Beans is $4.44 per kg in March,while a total of 478,023 60-kilo bags of Uganda coffee valued at US $80.99 million were exported at an average weighted price of US $2.82/KG.The following bar graph indicates the monthly quantity of coffee that Uganda exported in the past few months,showing that Uganda is a main supplier of coffee beans.
Total Quantity of Uganda Coffee Exported:June 2021-May,2022(Unit: KG)
The following bar graph indicates that in 2020/2021 China imported coffee green beans from the countries like Vietnam,Brazil and others.Vietnam is the main supplier of coffee beans.
The following bar graph indicates that in 2020/2021 China imported instant coffee from the countries like Malaysia,Vietnam and others.Malaysia is the main supplier of instant coffee.
The following three bar graphs indicated that despite China’s imports on coffee decrease in Feb 2022 but China still ranked 11 among Uganda’s coffee importers, compared to 31 in the ranking in January 2022 .Surprisingly,China ranked 9 in May,2022 ,reaching a new highest record of 425,520 kg with the joint efforts of Chinese Embassy in Kampala and Ugandan Embassy in Beijing.
China’s import of Coffee Green Beans in the past few months(Unit:KG)
China’s ranking of Uganda Coffee’s Destinations in the past year
Total Quantity of Uganda Coffee Green Beans exported to China in the past months(Unit:KG)
According to Mordor Intelligence,the Chinese coffee market is projected to witness a CAGR of 10.42% during the forecast period 2022-2027.The overall Chinese coffee market has been the least affected by the COVID-19 pandemic. As per the analysis, in 2020, an average of one new coffee shop opened every day in China’s Chengdu City. This pushed the total number of coffee shops in the city to over 4,000, just after Shanghai and Beijing. Chengdu is the third-largest coffee market in China. Moreover, with strict lockdown measures being imposed in the country, consumers in China have been resorting to at-home coffee consumption, thus, increasing the sales of instant coffee in the country during the COVID-19 pandemic.According to data from the China Coffee Association Beijing (CCAB), coffee consumption is increasing at an annual rate of 15%. The current leaders in the market, like Starbucks and Nestle, have played a significant role in the growth of the coffee culture in China.
The numbers of Starbucks in China from 2012 to 2021.
Top 10 China’s cities with most coffee shops
As the most populated country in the world,China will have a huge coffee market with more and more young people embracing coffee.The following bar graph indicates the market scale and forecast of China’s coffee industry.
Market Scale and Forecast of China’s Coffee Industry from 2020 to 2025 (Million US$)
Instant coffee accounts for more than half of coffee consumption by the Chinese people.The following two bar graphs indicate that in 2020,despite instant coffee dominated in Mainland China ,its percentage decreased from 69% in 2017 to 52.4% in 2020 and more and more people are showing their preference in ground coffee.
China’s import of Instant coffee,roasted coffee and green beans(Million 60-kg bag)
Uganda coffee is very unique.It is an inevitable trend for Uganda coffee to gain popularity and even dominance in China.Now let us get back to the title “How Uganda can tap into the China coffee market”
Since I came to Uganda,I have met at least 20 talented youth who can speak very good Chinese language,unfortunately some of them had migrated to UK,Canada or USA for different reasons.They are treasures for the coffee’s penetration and should be the backbone of the promotion of Uganda coffee in China.In the near future,coffee companies ,whether in China or Kampala,can give them full time jobs.This measure will be quite contributive to the establishment of Uganda coffee fame in China.
Strategically,building stores is necessary.14 years ago,we bought lands in Accra and Tema and built several big stores ,then we brought floor ceramic tiles from China to Ghana and resold them at a wholesale price.Such strategy also suits to coffee business in China from Uganda.In my opinion,Shanghai,being the largest city with most coffee shops,is a best location for the store,though the southern city of Guangzhou has an Uganda Consulate.
Initially,funds can be raised through building joint ventures in China.The local partners, having good knowledge in the law and markets,can share risks of Ugandan investment in China.Both local partners and Ugandan investors are able to give full play to each party’s advantages.
As to coffee products, besides green beans,instant coffee could be a central product for the joint ventures given that 52.4% of Chinese coffee consumers prefer instant coffee.It is convenient and comfortable to drink a cup of instant coffee during a trip.
Good wine needs no bush.I believe Uganda coffee will win popularity in China,which needs the joint efforts of both Chinese and Ugandan governments.The good news is at the eighth Ministerial Conference of Forum on China-Africa Cooperation in November 2021, China announced that it will open “green lanes” for African agricultural exports and China will support and facilitate the entry of more high-quality and distinctive African agricultural and food products into the Chinese market, bringing more tangible benefits to the Chinese and African people, the Chinese Foreign Ministry spokesperson said on August 16,2022.
