| 07 Jun 2010 |
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Coffee re-export is Dubai's cuppa
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Dubai, especially the Jebel Ali Free ZoneJebel Ali Free Zone
, is increasingly becoming a hub of coffee re-export as more and more companies import coffee beans from Africa and South America to export it to countries in the GCC and the rest of the Middle East.In the past five years, there has been a change in trend of how coffee has flowed into the emirate and the region.
Earlier, coffee beans roasted in the UK (London) and other European countries were brought into the region. Lately, however, companies have set up roasting facilities in Dubai and are sourcing raw coffee beans from producer countries and exporting it to destinations in the GCC, the wider Middle East and parts of Asia and Europe.
Richard Jones, Managing Director of Coffee Planet, the UAE, said his business grew 17 per cent in 2009 and 28 per cent in 2008. "We began our operations in Dubai about five-and-a-half years ago. We initially imported coffee beans roasted in London. But in the beginning of 2008, we established a roastery in Dubai," he said.
The company's strategy includes reaching out directly to coffee producers in Africa and South America, securing long-term supplies, importing coffee beans to Dubai, processing it here, and then re-exporting a good volume of the processed beans. "We also sell to supermarkets, hotels, besides running retail outlets at over 130 fuel stations in the country."
The company used to import about two tonnes of coffee beans per month four years ago. The volume has now grown to about 18 tonnes a month - a figure that Jones said could have grown higher had a global financial turmoil did not happen in 2008-09. The company's exports head primarily to countries like Oman, Jordan and Malaysia. Jones said that companies like his currently operating in the UAE would number less than 10.
Others from the field said there is a lot of potential for coffee companies in the region. "When the Dubai Multi Commodities Centre (DMCC) called a conference of tea producers recently, a good number of coffee producers had also come in. The GCC itself has one of the highest per capita consumption of beverages in the world, and, therefore, it makes sense to establish coffee roasteries here," a senior executive at a coffee company said.
Dubai has taken initiatives to increase tea re-export. Two years ago, the DMCC established the Dubai Tea Trading Centre to stimulate tea trade. A record 7.5 million kg of tea traded through the centre in 2009, which was a rise of 26.5 per cent over 2008. Dubai as a whole saw the trade of 112.3 million kg in 2009.
Similar statistics are not available for coffee. Compared to tea, Dubai sources coffee from much more diverse locations ranging from countries in South America to the ones in Africa and Asia, but the geographical scope of exports is narrower. Senior executives from coffee companies said steps like easy financing and launch of coffee futures on the Dubai Gold & Commodities Exchange can help develop Dubai as a hub of coffee trade.
By Shashank Shekhar
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