Tuesday, September 19, 2017

Myanmar coffee gains market share amid rising demand from first world

Myanmar coffee is gaining market share globally and opportunities for local coffee producers to gain international exposure have been on the rise over the past two years.

A worker gathers coffee crops at the Green Land coffee plantation in Pyin Oo Lwin, Mandalay. Phyo Wai Kyaw/The Myanmar TimesA worker gathers coffee crops at the Green Land coffee plantation in Pyin Oo Lwin, Mandalay. Phyo Wai Kyaw/The Myanmar Times

“Although local coffee producers have had to work without good foreign market connections and experience in the past, they were still able to sell coffee to many countries including the US in the past two years, said U Sai Wan of Green Land, a coffee plantation in Pyin Oo Lwin, Mandalay.

Since the establishment of the Mandalay Coffee Group three years ago, demand for Myanmar coffee has been on the rise on the back of interest from countries like the US, where coffee sellers have been eager to offer their customers higher quality and a greater variety of coffees.

The Mandalay Coffee Group is a consortium of 50 coffee estates that have committed to help further the country’s coffee development. In recent years, it has worked with international groups like the Coffee Quality Institute and US-based Winrock International, which focuses on international agriculture development.

Last year, Myanmar exported almost 500 tonnes of coffee, of which close to 40 percent, or around 180 tonnes, was shipped to the US.

“Since we established the Mandalay Coffee Group, we have been able to export Myanmar coffee to the US, Japan and Switzerland in 2015 and, last year, we added the UK, Iceland, Australia, Dubai, Hong Kong, Russia and Netherlands to the list of international customers. This year, our export market could get bigger as we have got pretty good momentum going now”, U Sai Wan said.

Higher standards

Now, local producers are upping their game. “The Myanmar coffee industry started from scratch to where it is today, in demand by some of the world’s richest countries. We need to move forward from this position of strength. We will have to find out what the role of the State is in protecting the coffee industry in Myanmar. We must also provide training to coffee growers to maintain good standards,” U Ye Myint, head of the Myanmar Coffee Association in Mandalay, said by telephone on August 18.

“Coffee is not included in the list of major crops but that condition will have to be fulfilled to promote Myanmar coffee as a leading export product.”

Things are looking positive on that front. On August 17, a workshop for developing the coffee sector in Myanmar was held in Nay Pyi Taw and cooperation between the public and private sectors was also discussed.

Going forward, efforts must also be made to help coffee producers manage and reduce costs. “The most important factor in keeping costs sustainable is land usage. For example, as coffee crops require shade to grow, coffee can be planted in forested areas, which also supports biological diversity,” U Ye Myint said.

If managed well, the sector may well become a leading one in Myanmar in the years to come. To be sure, business owners say some coffee plantations take just three years to break-even. Some coffee trees can also continue yielding coffee for up to 25 years.

In Myanmar, Catuai coffee beans are mostly grown in Ywar Ngan, while Caturra and Costa Rica beans are planted in Pyin Oo Lwin, said U Sai Wan. Currently, the price per tonne of local coffee is K4.5 million, which is up by almost 30pc in two years. In the international market, a tonne of local coffee can be sold for US$4,900-US$7,000, depending on quality.

This year though, global coffee prices are expected to remain flat. “Profits will boil down to the quality. of our product. The higher the quality, the higher the price we can get,” said U Sai Wan.

“As the government is not yet able to support us, we business owners will have to go ahead first and try it ourselves”.