Coffee gains foothold in tea-drinking China

By Niu Shuping and Nao Nakanishi

XINGLONG, China/HONG KONG (Reuters) - Du Yansheng, a farmer on the southern Chinese island of Hainan, hasn't gone without his morning cup of coffee in five decades, not even during the Cultural Revolution -- when such "mock-Western" practices could have landed him in prison.

"People here have never stopped drinking coffee," Du told Reuters in Xinglong, the cradle of coffee culture in an otherwise tea-drinking country.

Du's father was one of China's first coffee farmers, at a time when it was considered an exotic foreign beverage. He brought robusta beans from Indonesia in the 1950s -- decades before Nestle or Starbucks Corp. arrived on China's shores.

Today, coffee is fast catching on, especially among younger urban Chinese, and the percentage increase in demand is in the double digits -- though still less than one tenth of tea consumption.

And coffee grown in China is beginning to climb the quality ladder. Arabica from the southern province of Yunnan is now catching the eye even of specialty roasters such as Starbucks or Italy's Illy.

"Demand for Yunnan arabica is expanding," said Tomonori Hashimoto, a trader from S. Ishimitsu Co. Ltd in Japan, one of the world's top coffee consumers, and known for being picky.

"There are clients eager to try the new and the rare. It's mild and easy to drink," he said by telephone from Tokyo.

Official data showed Chinese coffee exports jumped 40.8 percent to 6,484 tonnes during the first quarter of this year, with more than 4,000 tonnes headed for Germany and Japan.