Cof­fee buzz catches on

The Myanmar Times - - Front Page - – Trans­la­tion by Win Thaw Tar and Khine Thazin Han thanhtoo@mm­times.com HTOO THANT

Agri­cul­ture min­istry of­fi­cials are plan­ning to draw up a cof­fee strat­egy aimed at ramp­ing up the coun­try’s mea­gre pro­duc­tion in or­der to tap into a boom­ing global mar­ket.

DE­MAND for cof­fee is boom­ing in an in­creas­ingly caf­feinated world, and al­though Myan­mar is ca­pa­ble of pro­duc­ing in­ter­na­tional-qual­ity prod­uct it has ne­glected the crop for years. But agri­cul­tural min­istry of­fi­cials are hop­ing to de­velop a co­or­di­nated strat­egy to ramp up pro­duc­tion and con­nect cul­ti­va­tors with world mar­kets.

Myan­mar has been grow­ing cof­fee for years but in rel­a­tively small amounts. An itin­er­ant Scots­man brought a strain of ara­bica to the Man­dalay hill town Pyin Oo Lwin in the 1930s, and it is still grown to­day, U Myint Swe, di­rec­tor of the cof­fee crop branch un­der the min­istry’s agri­cul­ture de­part­ment, told The Myan­mar Times.

But the agri­cul­tural sec­tor’s over­whelm­ing fo­cus has been on an in­dus­trial approach to grow­ing crops like rice and beans for do­mes­tic con­sump­tion and ex­port, said U Tin Htut from the Min­istry of Agri­cul­ture, Live­stock and Ir­ri­ga­tion.

“Cof­fee was pre­vi­ously a ne­glected crop,” he said dur­ing a min­istry re­search work­shop on cof­fee grow­ing in Myan­mar on Septem­ber 28. But U Tin Htut is hop­ing that min­istry work­shops can help pro­duce a strat­egy to boost cof­fee pro­duc­tion and tap into a strong global mar­ket.

The an­nual growth rate in global cof­fee con­sump­tion has av­er­aged 2 per­cent since 2011, and the world con­sumed the equiv­a­lent of 152.2 mil­lion 60kg bags in 2015, ac­cord­ing to the in­ter­gov­ern­men­tal In­ter­na­tional Cof­fee Or­gan­i­sa­tion.

US de­mand is higher than ever, and two ship­ments of cof­fee beans to the US in Au­gust rep­re­sented Myan­mar’s first com­mer­cial-scale ex­ports to that coun­try in over 15 years, ac­cord­ing to Reuters. The US re­cently an­nounced it was lifting al­most all re­main­ing sanc­tions against Myan­mar, and would re­in­state gen­er­alised sys­tem of pref­er­ences (GSP) ben­e­fits on Novem­ber 13.

Myan­mar is well placed to take ad­van­tage of the global thirst and im­prov­ing eco­nomic re­la­tions with the US. At a US cof­fee expo in June 2015, Myan­mar-pro­duced strains of ara­bica and cati­mor cof­fees were deemed world-stan­dard in a qual­ity test – re­ceiv­ing higher marks than most other cof­fees shown at the event, U Myint Swe said.

“The strains have also been tested in Ger­many, and they also sent a re­port say­ing the qual­ity was world­stan­dard,” he added.

Lo­cal firms have taken ad­van­tage of Myan­mar’s cli­mate and re­gional de­mand. Yangon-based firm Cof­fee Ge­nius, owned by Ko Ngwe Tun, has ex­ported its Shan highlands cof­fee to Sin­ga­pore and also en­joyed high marks from the Spe­cialty Cof­fee As­so­ci­a­tion of Amer­ica.

But al­though Myan­mar’s lo­cal in­dus­try can pro­duce ex­cep­tional qual­ity, it also faces pro­duc­tion and mar­ket­ing prob­lems that have made it hard to reach in­ter­na­tional mar­kets, U Myint Swe said.

Strains like the ara­bica have been grown for over 80 years, but a lack of finance has seen lit­tle in the way of progress.

“Crop yields have de­creased steadily, al­though the qual­ity has not,” U Myint Swe said. The use­ful life of a cof­fee plant, de­pend­ing on grow­ing con­di­tions, is 20 to 30 years. “In other coun­tries, once a cof­fee plant reaches 30 years old it is cut down and new ones planted,” he said. “But in our coun­try we don’t cut them down, we make ex­ist­ing plants pro­duce new shoots and branches.”

Al­though the in­ter­na­tional mar­ket is boom­ing – driven mainly by ris­ing con­sump­tion in de­vel­oped economies – Myan­mar’s lo­cal mar­ket for cof­fee is poor and cul­ti­va­tors are pro­duc­ing less in re­sponse, U Zaw Tun Myint, di­rec­tor gen­eral of the Agri­cul­ture De­part­ment, told The Myan­mar Times.

The min­istry wants to see cof­fee planted and grown ac­cord­ing to in­ter­na­tional-stan­dard prac­tice, but in or­der to get cul­ti­va­tors on­side the min­istry has to im­prove the mar­ket, he added.

“We need to co­op­er­ate with the de­part­ment and ex­pand the mar­ket for grow­ers,” he said. “Right now prof­its [in the lo­cal mar­ket] are low, so grow­ers lower in­puts, which low­ers qual­ity, which low­ers prices and pushes prof­its down fur­ther. We need to re­verse this vi­cious cy­cle.”

The acreage given to cof­fee plan­ta­tions in Myan­mar is shrink­ing and is now less than 50,000 acres – down from over 60,000 acres at the peak of pro­duc­tion many years ago, he said.

U Tin Htut from the agri­cul­ture de­part­ment’s cof­fee branch said col­lab­o­ra­tion be­tween agri­cul­tural ex­perts, ex­porters and planters is cru­cial to rem­edy the slump in pro­duc­tion. He is help­ing work on a strat­egy paper for cof­fee de­vel­op­ment in Myan­mar.

“Now is the time to re­ally per­form,” he said. Myan­mar has the hu­man re­sources and skills, but needs to im­prove the agri­cul­tural sys­tem in or­der to catch up with re­gional com­peti­tors, he added.

The cof­fee strat­egy should in­clude tar­gets for the next 10 years, and cover mar­ket re­search, finance, tech­ni­cal as­sis­tance, farmer train­ing and which strains should be planted more widely, he said. The plan will be sent to a par­lia­men­tary eco­nomic com­mit­tee, which in­cludes the vice pres­i­dent and of­fi­cials from the finance and com­merce min­istries, he said.

U Myint Swe said the plan will take around six months to draw up, and should in­volve as­sis­tance from ex­perts from the agri­cul­ture de­part­ment, USAID, the Myan­mar Cof­fee Plant­ing As­so­ci­a­tion and other cof­fee ex­perts.

But in­dus­try in­ter­est bodes well. At the min­istry work­shop on cof­fee grow­ing last month over 40 mem­bers of the Cof­fee Plant­ing As­so­ci­a­tion and the pri­vate sec­tor at­tended the meet­ing, joined by over 100 ex­perts and of­fi­cials from gov­ern­ment de­part­ments, U Zaw Myint Tun said.

“It was the first big meet­ing on cof­fee in the last five years,” he said. “It’s a very en­cour­ag­ing sit­u­a­tion. We held meet­ings in the past, but there wasn’t as much free­dom as there is now.”

Photo: Aung Htay Hlaing

A barista com­petes in the Myan­mar Latte Art Com­pe­ti­tion in Yangon in June.

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