Guatemala City, June 20 - Guatemalan farmers see China as the most important market of the future for their coffee, but say they are worried ties to the Communist country's foe Taiwan will limit growth in exports.
Coffee consumption in tea-drinking Asia has risen in recent years, especially in Japan, which is now the second largest importer of Guatemalan coffee after the United States.
Grower group Anacafe believes China's fast economic growth means a millions strong, growing class of young, upwardly mobile consumers would be next to adopt coffee drinking habits.
"If every citizen in the People's Republic of China drank one cup of coffee a year, there wouldn't be enough coffee in the world," said Rasch.
But Rasch is worried Guatemala will miss the good times.
This month Guatemala's coffee growing rival Costa Rica, which also exports very high quality Central American mild arabica beans, ended a 60-year friendship with Taiwan and renewed diplomatic relations with mainland China.
China shuns commercial relationships with governments like Guatemala that recognize self-ruled, democratic Taiwan as a country, claiming it as Chinese territory since nationalist forces were defeated and fled to the island at the end of a civil war in 1949.
China's new envoy in Costa Rica said on Tuesday the renewed diplomatic relations could improve the Central American country's market access, a possibility that concerns Anacafe.
"Costa Rica's coffee will now enter directly into China and we will have to go via other countries, which makes us less competitive," said Rasch.
Guatemala, along with the rest of Central America, has said it will stay loyal to Taiwan. But some officials see a potential for a domino effect, with other countries following Costa Rica's example and switching allegiance.
Guatemala is the region's largest coffee producer, exporting 3.5 million 60-kg bags of coffee during the 2005/2006 harvest. Less than 14,000 bags went to the island of Taiwan, a tiny amount compared to what could be sold to China's population of over 1 billion people.
China has seen double-digit growth in coffee sales in the past couple of years. In 2006 sales hit $2.4 billion and are predicted to climb to $3.6 billion by 2011, according to market research firm Euromonitor International.
The number of per capita coffee drinkers in the country is still small, but will only increase as urban wages rise and young professionals adopt western trends and begin drinking coffee as a status symbol, said Euromonitor's analysts.
An increasing number of foreign investors and Chinese returning after living abroad will also boost the number of coffee drinkers.
"What we are seeing in China is a desire to experiment with Western lifestyles, and coffee is an icon of Western culture," said Rasch.
Starbucks-style coffee shops are springing up in big cities like Shanghai and Beijing and are expected to expand with the 2008 Chinese Olympics.
"The same thing happened in Japan when we had the Olympics in the 1970s, now Japanese drink more coffee than tea," said Takatoshi Tsutsumi head of Mitsubishi Corp.'s coffee export office in Guatemala.
"Ready-to-drink" canned coffee drinks sold widely in vending machines and made from high quality beans have massively boosted sales in Japan.
In China, instant coffee is still popular and it will take time for buyers to develop a taste for the gourmet, high-altitude beans grown in Guatemala, said Tsutsumi.
China also has a complicated market that varies widely from province to province and a bureaucracy that can be hard to navigate, he added.