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Costa Rican Coffee to Stimulate China?

May 27

Costa Rican Coffee

Million dollar loans, a new national football stadium and the construction of a China town in San Jose are just a few of the exchanges between two familiar nations. The Chinese-Costa Rican relationship has grown in leaps and bounds over the past year since the Latin American country switched its diplomatic ties from Tawain to Beijing.

Indeed, at the moment, negotiations are being arranged to form a Free Trade Agreement between the two countries, something which the Costa Rica coffee industry sees as a potential goldmine.

Adrian Hernadez, a member of the board of directors at the Coffee Institute of Costa Rica has described the Chinese market as and small yet new one that has massive potential. Given the country’s population of 1.3 billion people, it is no surprise that this market is seen as an exciting prospect.

Currently the coffee industry is one of Costa Rica’s largest exports along with tourism, yet last year only a minute number of 0.1% of its exports went to China largely due to the tariff of up to 15% that has been imposed by the enormous nation. A Free Trade agreement would in theory remove this tariff and allow for larger amounts of coffee to be exported to the Asian country.

In November the industry reported that exports were down by 2.9%, however if Costa Rican coffee businesses were to attract even a small percentage of the Chinese consumer market the demand would be huge and problems such as this would become non existent with Costa Rica’s entire coffee crop sought by foreign buyers.

Despite the obvious attractions of the Chinese market, the move is being met with apprehension by several leaders in the industry. The current economic situation means that to introduce a high-end product to the country whose middle class are already feeling the pinch could backfire. Representatives from several coffee industry firms in Costa Rica have already been to visit China in order to try and assess the market and back in 2004 Café Britt opened a store in China with little success.

With coffee being one of Costa Rica’s largest exports and China having a gigantic potential consumer market, the possible Free Trade Agreement discussions set to get under away early next year could result in the Costa Rica coffee industry reaping massive profits.

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