Farmers in Africa have found a new clientele for their crops — affluent Chinese.
A growing taste for fine chocolate, wine, nuts, and coffee among China’s consumers has created a new sector of international trade. According to the Wall Street Journal, the country’s chocolate imports increased from $99 million in 2009 to $352 million in 2013, and imports of coffee and wine also tripled over that period. The London-based International Wine & Spirit Research also reports that China became the world’s top consumer of red wine last year.
“China is where our future lies,” says Hein Koegelenberg, Chairman of L’Huguenot winery in South Africa. Last month, L’Huguenot welcomed its top Chinese salespeople, who each sold at least $32,000 worth of the company’s wine in their home country. Altogether, L’Huguenot sold 1.5 million bottles in China in 2013.
Koegelenberg set his sights on China a decade ago after his high-end La Motte brand failed to take off in the United States. He arranged a joint venture with Woo Swee Lian, president of direct-sales firm Perfect China Ltd., to cater specifically toward the Chinese wine market. In 2013, L’Huguenot purchased a vineyard to produce Shiraz, Shiraz-Pinotage, and Chenin Blanc wines for their Chinese customers, and hope to soon “launch a cheaper varietal” that could double sales.
“In China, all the best-selling wines are French, and they start with an ‘L’,” Woo commented.
Chinese demand for cashews is growing as well. Cashew prices are projected to increase by 20 percent globally through 2019, and China is quickly surpassing the United States as “the globe’s top market for the nuts.” Africa, the source of half of the world’s supply of cashews, will have to increase production by 9 percent every year to keep up with consumer demand.
Yet farmers will no doubt find the increase in production lucrative, as Chinese consumers, unlike Americans, generally don’t “reject nuts that are broken or discolored,” according to Joseph Yeung, the managing director of Ghana-based Mim Cashew and Agricultural Products Ltd. Yeung can sell his cashews for 10 percent more in China than in the United States. Yeung has already begun to increase production, and expects Chinese consumers to form half of his clientele within the next three years.
Although China now consumes only 1 percent of the world’s coffee, demand for the drink is growing rapidly; by 2015, Starbucks plans to have 1,500 Chinese locations. Africa has also emerged as a major supplier of coffee to China. Uganda Coffee Development Authority, for instance, opened a roasting plant in Beijing three years ago to produce the Uganda Crane Coffee Ltd. brand, a decision that is proving profitable for the company. Managing Director Henry Ngabirano wants to double the country’s exports to China from its current rate of 10,000 tons a year by 2016.
South African goatherds are also finding ample business in the East. The country is the world’s greatest producer of mohair, a fine wool that comes from Angora goats. The “industry body” Mohair South Africa experienced a boom when demand in China, the world’s second-biggest buyer of the textile, suddenly grew in 2012. Production output also grew by 3 percent in 2013 to 2.4 million kilograms.
“China is becoming a more sophisticated market,” says Deon Saayman, general manager of Mohair South Africa.
image credit: ethan crowley