Chinese province to expand farms to supply coffee makers

HONG KONG, May 26 (Yonhap) -- China's southwestern province of Yunnan said Thursday that it will expand existing coffee farms to supply coffee makers trying to cater to a growing population of coffee drinkers in China.
The Yunnan provincial government said it plans to invest 3 billion yuan (US$462 million) in expanding coffee bean production from the current 38,000 tons to 200,000 tons by 2020.
It will increase coffee acreage from the current 26,700 hectares to 100,000 hectares within the same period.
Pu'er, a city in Yunnan province, also said it plans to enlarge the farms, which produce coffee beans, from 15,333 hectares to 40,000 hectares within 10 years. The city is globally known for its local tea products,
Currently, 40 percent of the coffee farms in Pu'er are used for U.S. coffee chain Starbucks Corp. and Nestle S.A., a food company based in Switzerland that has the Nescafe coffee brand.
The southwestern Chinese region has become a key Chinese battleground for the world's major coffee makers hoping to get access to the country's prime plantations.
In China, only the provinces of Yunnan and Hainan are known to be suitable for growing coffee beans, contributing almost 100 percent of the country's total output.
Starbucks signed an agreement last November with the Chinese government to set up its first-ever coffee bean farm at Pu'er in order to secure a stable supply of coffee beans.
Hogood Coffee Corp, China's largest coffee maker and supplier with an annual production of more than 5,000 tons, has provided coffee beans to the world's coffee giants, including Nestle and Maxwell House, for about a decade.
It has a plantation area of 8,000 hectares, about 25 percent of the total growing area in China, and plans to expand it to 20,000 hectares within three years.
Coffee sales in China are expected to reach $3.6 billion this year, according to research company Euromonitor International.