Dar es Salaam can use EPZ to grab Shanghai’s coffee market in China

TANZANIA: TANZANIA can benefit from the commercial and financial opportunities that are growing globally, particularly in China, in a truly mutual benefit by exploring economic intelligence for products the country has a comparative advantage.

It implies that the country will be able to seize these chances to boost revenue, mainly foreign exchange if it can effectively arrange itself and look to the future intelligently.

In this aspect, pursuing emerging markets that require commercial crops, for which Tanzania possesses a comparative advantage could help to address the country’s chronic economic stagnation and absence of foreign exchange, notably the dollar.

As an observer of investment issues and transaction advisor for investment-related and export, I see a lot of potential export opportunities that are overlooked due to limited perspective or incapacity to perceive these incredibly beneficial opportunities for the nation.

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As a Tanzanian, I say this because, to date, I have not heard from those who represent our nation on how we can capitalise on business opportunities to increase exports or, if they have, on how we can increase sales of our products especially those related to agriculture and strengthen our nation’s ability to facilitate access to foreign funding while also improving the lives of our local farmers.

Given that those involved in economic diplomacy may not have recognised these opportunities, I will use my economic intelligence analysis to assist in seeing, in one instance only, how we can take advantage of the country’s established SEZ and EPZA to export our goods and generate millions of dollars for the country’s development.

Since Tanzanians has established EPZs and SEZs and some of the country’s significant coffee processors are based within these setups, how much of their output reaches international markets, such as the world’s fast-growing coffee market? Or as a nation, overlook the benefits of these special zones?

Have we shifted our attention from operational excellence to administrative aspects? Although I’m not entirely sure if we are on the same page to explore markets, the following analysis is based on economic intelligence regarding China’s demand and consumption of coffee.

This is a huge opportunity for Tanzania as one of the coffee producers, both arabica and robusta in sub-Saharan Africa.

Shanghai has contributed the most to China’s coffee industry, which has grown significantly in size over the past few years and is expected to reach 265.4 billion yuan (US$36.7 billion) last year according to a report released at the Shanghai International Coffee Culture Festival opening ceremony on May.

China’s Urban Coffee Development Report 2024, co-released by Hongqiao International Coffee Hub, Shanghai Jiao Tong University, online service platform Meituan and food delivery platform Eleme, noted that the country’s coffee industry has grown at an average growth rate of 17.14 per cent over the past three years that signals good growth demand.

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According to the analysis, the average amount of coffee used per person in China in last year was 16.74 cups, over twice as much as the nine cups consumed in 2016. With 9,553 coffee shops at the end of last year, more than any other city globally, Shanghai still has the most cafes in the world.

When Xu Jian, Vice Dean of Shanghai Jiao Tong University’s School of Media and Communication, presented the study at the event, she stated that Shanghai had 1,023 more coffee shops than in 2022, accounting for 6.1 per cent of all coffee shops in the country.

Shanghai is growing into a central hub for international coffee businesses and a major hub for China’s coffee exports, with 384,859 foreign coffee companies based there in 2023, according to Ms Xu. Over 40 per cent of the nation’s coffee beans were exported by Shanghai-based businesses last year.

In 2023, Shanghai’s export value of concentrated coffee or coffee-related items surpassed 21.45 million Yuan, representing a more than 70 per cent growth rate compared to 2029. Global interest in local coffee goods was sparked by the flourishing coffee culture, which also fuelled the development of creative Chinese specialty coffee flavours such as raw coconut lattes and tea-based coffee.

Eleme reports that take-out coffee orders in Shanghai climbed by 40 per cent between 2019 and 2023, with consumers primarily in the 28–43 age range.

Eleme’s Head of Public Affairs, Cheng Yuanuan, believes that since the age group’s coffee orders have been rising recently, they could eventually become a significant consumer force. On Eleme, women make up around 70 per cent of the coffee drinkers.

Shanghai is the best place in China for coffee culture, with 20 per cent of all cities having 20 per cent or more of takeaway coffee in 2023. Coffee has infused into citizens’ daily lives and integrated into urban development, becoming a distinctive symbol of urban culture.

Today, coffee is a world-class city name card for Shanghai and a major draw for young people from around the globe who come to Shanghai, stay there, and fall in love with the city’s culture. Up to May 4, the Waste Band hosted the city’s most fantastic coffee carnival, bringing together sports, culture, tourism and exhibitions.

The event featured performances and a gathering of well-known coffee businesses along 1.5 kilometres of shoreline.

More than 180 coffees, including foreign brands, attended the fanfare, which served as the primary market for the Shanghai Foreign Coffee Culture Festival this year.

Events like the Bund Coffee Festival at the Bank Finance Centre, a coffee drama festival in the Changning District, a coffee campaign culture festival in the Putuo District, and a global coffee industry development forum in the Minhang District in China have attracted more than 16 districts in addition to the Lin-gang new area, altogether showing how the demand of coffee consumption is growing up in China.

In my view, the analysis of the growth of coffee business opportunities in the Chinese market demonstrates to us that, as a nation, we can contribute significantly to raising the sale of our goods overseas and earning foreign currency if we can effectively organise ourselves, recognise the importance and dynamic of information, know how to use data and learn how to use it.

The analysis of the growth of coffee business opportunities in the Chinese market demonstrates to us that, as a nation, we can contribute significantly to raising the sale of our goods overseas and earning foreign currency if we can effectively organise ourselves, recognise the importance and dynamic of information, know how to use data and learn how to use it. It is crucial to remember that Tanzania has created several SEZs and intends to expand the programme; however, this goal may be hampered by choices that, if not carefully considered, could defeat the original intent of creating EPZA shortly.

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Considering what is happening, it’s unclear whether these zones are entirely functional, only exist theoretically, or fall somewhere in between to attract businesses that can seize emerging market opportunities. Special Economic Zones’ potential utilised well can be a game changer.

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