The exclusive contract between the Ministry of Agriculture and Fisheries and the Zhejiang Dunn's River Coffee Company for sale of Jamaican coffee in China will end on February 1, 2013, opening the way for a wider network of operators.
Coffee Industry Board (CIB) director general, Christopher Gentles, said Friday that an exclusive contract will no longer be given to any single player in this market.
The expiry of the contract will open the way for new Chinese importers who, after February 1, can apply for authorised foreign importers' permits.
Gentles noted, however, that only a limited number of dealers will be approved by the CIB.
The end of the contract marks a shift in the policy of the CIB in relation to China.
"The Coffee Industry Board will not be undertaking the sale of coffee in China, but will be supporting and facilitating the sale of Jamaican coffee through our licensed coffee dealers here in Jamaica," said Gentles.
The exclusive contract with Zhejiang Dunn's River Coffee Company called for 32 tons of coffee sold in two shipments - one of 16 tons in January 2010 and another 16 tons in April 2011. Payment for the second shipment of green beans to the People's Republic of China was reportedly worth US$436,000.
efforts to market in china
Gentles noted that the company has been supported by the CIB, which has made significant efforts to market the Jamaican coffee brands in China.
The drive for Chinese markets began in 2009 when Japan, which previously took at least 90 per cent of each crop, terminated forward payments for Jamaican coffee and the CIB began looking in earnest to diversify markets.
Back then, Gentles noted that China could possibly be the top consumer of coffee in 10 years.
Other markets which have seen greater returns on investment to date are Europe and the United States where sales have grown year on year.
Challenges in the Chinese market related to trademark led to a coffee specialist from the CIB being assigned to China last year to maintain and preserve the quality of Jamaican coffee and protect its Jamaica Blue Mountain and Jamaica High Mountain Supreme trademarks.
Gentles said, "there is no doubt that China, with its huge population and its growing middle class and wealthy population, will represent one of the most interesting markets for Jamaican coffee in the future."
He added, however, that the average consumption of coffee in China was less than one million bags per year. "The reality is that the market in China for luxury coffee is still very small," Gentles said.
In September 2011, Starbucks, the world's largest coffee retailer, announced plans to triple its coffee shops in China over four years. Also in 2011, the privately owned Jamaican company Gold Cup Coffee won a contract to supply Starbucks with 110 barrels or 7,700 kilograms of coffee. The drink was expected to retail at US$5 (J$430) per cup in 500 premium outlets in the United States.