UPDATE: China and Colombia Signed Cooperation Plan To Adhere to Chinese New Silk Roads
(Adds comments from director of the coffee exporters association Asoexport)
China and Colombia Signed Cooperation Plan To Adhere to Chinese New Silk Roads
Bogota (Coffee Network)- Colombian President Gustavo Petro and his Chinese counterpart Xi Jinping signed an agreement to join China's New Silk Road, a move that would increase Chinese foreign direct investment into Colombia, and boost Colombian exports, including coffee and cocoa.
China has agreed to increase purchases of Colombian goods, which could benefit coffee and cocoa exports.
Petro said he hopes Colombia will fill the country's annual deficit with China. "If we achieve this, which implies more exports to China, a significant amount, a flow of productive capital from China to Colombia, it would be a very prosperous country because its trade deficit would become zero and its ability to pay its debt would double."
At the Colombia’s Pacific port of Buenaventura, a maritime agency already has vessels that connect Shanghai and the Port of Buenaventura.
China also agreed to make inroads into five key areas: energy transition, agribusiness, reindustrialization of the health sector, artificial intelligence and technological infrastructure, and mobility. This plan also includes concessionary financing and non-reimbursable cooperation.
Colombia, the world’s third-largest coffee producer, exported 3.59 million 60-kg bags of green coffee in the first quarter, up 20.1% compared to the same period in 2024, the coffee growers federation said. Colombia exported to China 107,638 bags during the first quarter.
Colombia wants to diversify its export-base after the US president imposed trade tariffs to Colombian products, including coffee with a 10% tariff.
Colombia exported 11.018 million 60-kg bags of coffee in January-November, of which 4.344 million bags were shipped to the United States, according to the country’s coffee exporters association. China bought 465,262 bags in January-November.
China became the country’s sixth-largest main coffee export destination, and this ranking could improve as the coffee growers federation said they are seeking to make inroads more aggressively into China. Procafecol, the company behind the Juan Valdez coffee chain, has said it’s exploring entering the Chinese market with coffee shops.
In 2023, Colombia exported 539,264 bags of 60-kg to China, up 132% on the year when it shipped 232,289 bags, FNC figures show.
Of that total, private exporters shipped 389,416 bags in 2023, up 161% from the 149,051 bags in 2022.
FNC exported 149,848 bags to China in 2023, compared with 83,238 bags in 2022.
"China is an attractive market for Colombian coffee exports. Bean sales to that destination have increased by nearly 300% in the last five years and could continue their growth path if these agreements eliminate the 8% tariff on green coffee and the 15% tariff on processed coffee," said Gustavo Gomez, director of the coffee exporters' association Asoexport.
However, diversifying Colombian coffee exports does not mean replacing markets like the United States, which represents 40% of coffee exports. "Therefore, any rapprochement with China must be strategically pursued to maintain the good trade relations that have been established with the United States," he added.
China is showing signs of strengths for foreign coffee shop chains. Starbucks have also increased focus on smaller cities within China, such as Chengdu, which are seeing an explosion of coffee shop openings amid growing demand.
But in China, Starbucks is up against some fierce competition. Luckin Coffee just announced that operating revenue jumped by a staggering 41% in the first quarter to CNY 8.9 billion (approximately US$1.2 billion), with net profits of CNY 737 million reversing a loss from the same period the previous year. Luckin also expanded aggressively, adding 1,743 stores across China and reaching a total of 24,097 locations. Same-store sales at its company-operated sites increased by 8%, driven by a strategic focus on afternoon tea products designed to attract a broad customer base.
By Diana Delgado
