According to an announcement by Neumann Kaffee Gruppe (NKG), one of the world's largest coffee traders, the company has opened its first wholly owned subsidiary in China to meet the growing demand for coffee beans in the Chinese market.

According to the company's announcement, NKG's China business is headquartered in Shanghai, with coffee warehouses and distribution centers established in the Shanghai Yangshan Comprehensive Bonded Zone and the Jiangsu Kunshan Comprehensive Bonded Zone, along with a coffee cupping laboratory to ensure coffee quality control standards.

It is understood that Neumann Kaffee Gruppe (NKG) is a globally operating green coffee service group focused exclusively on coffee, headquartered in Germany, with more than 60 subsidiaries and over 3,200 employees in 27 countries, making it one of the largest coffee traders in the world.

NKG stated that this expansion enables it to be closer to customers, better understand their needs, and provide tailored coffee solutions. Coffee consumption in China is growing at 15% per year, and this move aims to better serve China's rapidly growing coffee market and respond to the expansion of major brand chains in that market, and is committed to contributing to the growth and development of China's coffee industry. However, before NKG, quite a few globally renowned coffee traders had already established companies in China, with companies such as Olam, ECOM, Volcafe and Sucfina having done so earlier.

However, in recent years, coffee trading companies have faced numerous difficulties due to multiple logistics disruptions during the pandemic, severe production cuts in coffee-producing countries caused by adverse weather, government policies, price fluctuations, and rising currency interest rates, and even Mercon Coffee Group, one of the coffee trading giants, filed for bankruptcy.

NKG also encountered many obstacles. Earlier in Kenya, due to the government's introduction of the Coffee Regulations 2019 and the Capital Markets (Coffee Exchange) Regulations 2020, regulatory changes in Kenya's coffee industry meant that NKG could not obtain licenses for the relevant business, and had to halt factory operations and lay off some employees.

In addition, this year's conflict in the Red Sea region has disrupted global transportation, with ocean freight rates continuously rising and transport costs increasing significantly. NKG, the world's largest coffee trading company, has recently begun expanding its market in Asia.

At the beginning of this year, NKG announced the expansion of its coffee business in Indonesia, launching a new operation for coffee import, storage and distribution in the country to serve Indonesian coffee brands and roasters, hoping to reduce shipping costs and time through coffee imports and exports within Asia.

According to China Customs data, 2023 China exported 1.78 ten-thousand tonnes of coffee beans, with an export value of 0.78 hundred million US dollars, of which nearly 70% went to Russia, 20% to Hong Kong, China, and the rest to the Netherlands and other countries/regions. Therefore, this time NKG's business in China includes the import and export of coffee products; while increasing coffee imports, it will also be able to increase China's coffee exports and raise the international standing of Chinese coffee.