November 12, 2009 / 4:10 PM / 10 years ago

Costa Rica coffee growers eye China free trade deal

* Free trade deal would open China to Costa Rica coffee

* Coffee drinking growing fast in tea-drinking country

* Some growers want high-quality beans protected

By Leslie Josephs

SAN JOSE, Costa Rica, Nov 12 (Reuters) - A planned trade deal between Costa Rica and China might bring a bounty to coffee growers in the Central American country which has an advantage over its neighbors who are still allied with Beijing’s rival Taiwan.

If a text is agreed for the trade pact, currently in the last round of negotiations, Costa Rica could become the third Latin American country after Chile and Peru to reach such a deal with China.

The tiny Central American nation is seeking “immediate access” of its high quality beans to the Asian giant, Costa Rica’s chief negotiator, Fernando Ocampo said. China is Costa Rica’s second-largest trade partner after the United States.

Last week, the two countries concluded a fifth round of free trade talks, but will draw up norms on coffee, sugar and other agriculture products in a sixth and final round of negotiation in mid-February.

On Thursday, coffee industry leaders from around the world are gathering in the Costa Rican province of Guanacaste for the annual Sintercafe three-day coffee conference.

Coffee demand in traditionally tea-drinking China has risen in recent years as the country’s fast economic growth means a growing class of young, upwardly mobile consumers could be next to adopt coffee drinking habits.

“It’s such a big market that there are always opportunities for different kinds of coffee,” said Juan Carlos Vargas, general manager of Coopetarrazu, which groups 250 small producers in the lush Tarrazu region of western Costa Rica.

Vargas said the Chinese market is developing a taste for Costa Rica’s fine coffee, not just cheaper, lower-quality Vietnamese robusta or domestically-grown coffee.

“They are going to be interested in our coffee. In fact, Starbucks is already there,” he said.

Starbucks Corp (SBUX.O), a top buyer of Costa Rican coffee, has nearly 700 cafes in China now and sees the potential for thousands of new stores. China has seen double-digit growth in coffee sales in the past couple of years.


Costa Rica ended a 60-year diplomatic ties with Taiwan and forged relations with mainland China in 2007.

China shuns commercial relationships with governments like Guatemala — Central America’s No. 1 coffee producer — that recognize Taiwan as a country.

But an untapped market of China’s size is not enough to win the immediate support of all farmers, who have called on the government to protect the high-quality reputation of Costa Rican coffee with a certification clause in the trade pact.

Ronald Peters, executive director of the government-funded Costa Rica Coffee Institute, said local farmers worry Chinese importers could mix their specialty beans in blends and pass it off as Costa Rican, diluting the brand.

“We have a clear position in terms of demanding a strict origin norm to inform (buyers) that the Costa Rican coffee was produced in Costa Rica,” Peters said.

Costa Rica’s small-scale coffee farmers, who grow the famed beans on parcels of just 5 hectares or less, comprise more than 90 percent of the country’s production. (Editing by Mica Rosenberg)

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