A mong many other things, China will eventually be the world's largest consumer of coffee, according to Li Hongfang, a coffee dealer in Yunnan, the country's leading coffee-growing region.

"It will take 30 years." He says it with a confident certainty that warrants some courage, particularly given that his Pu'er Sino Coffee Company is based in the hometown of China's most popular tea blends. Li was forced to change his company's name recently when local officials changed the town's name from Simao to Pu'er so more tourists will come here to buy and drink tea.

Pu'er is the home of pu'er tea, yet coffee plantations have also taken root amid the leafy plantations that stretch for miles along the hilly roads out of the town. A former soldier, Li learned his trade during three years working for Nestlé, which sources Arabica-type coffee beans here for its Nescafé brand. The province, he explains, has a climate to match Brazil and Colombia, both key Arabica-growing regions. Robusta beans are grown in more southerly Hainan province and Vietnam.

From Pu'er, Li ships coffee beans to Germany and Japan during harvesting, which is done during a dry season running from January to May. At an office on Meiyuan Lu in this unhurried provincial town, Li pores over countless bar charts and graphs, assessing the likely impact of a week of rain in Kenya on prices in London's coffee houses.

More of Pu'er's beans will stay at home in the future. "Young kids are taking [coffee] up very quickly," says Li. Local authorities have been keen to promote coffee as an alternative cash crop. At a government-owned demonstration farm 20 kilometres outside Pu'er, a farm manager straddles a shiny Lifan motorcycle to watch workers with wooden rakes move the red and yellow coffee beans about on a patch of concrete. During a two-week process, ripe cherries (the term for unwashed and unshelled beans) plucked from coffee trees are first dried in the sun, after which dried outer skins are removed from the bean.

The brown brick cottages of local farmers are outmoded by an elaborate new bean-processing station built with government cash among a forest of banana trees to wash and process the plucked cherries. Farmers who haul the beans to the station in shoulder-slung baskets get RMB2.2 (€0.20, US$0.32) per kilogram of cherries - compared to RMB2 for a kilo of standard tea leaves.

Quality beans

Li sells top-grade, ready-to-roast beans at RMB19 a kilo, shipping the beans to Europe via ports at Guangzhou and Hekou on the Vietnamese border. His best customer is Volcafe in Switzerland: 80 percent of beans are premium sales, with the rest going to Poland and Russia for cheaper instant coffee and cocoa mixes. Japanese coffee dealers pay better, says Li, but are "very strict on quality".

Farmers with government-allotted plots in the plantation are kept busy weeding, fertilising and pruning the trees in the plantation, most of them about 1.5 metres tall and six to seven years old. Transplanted as six-month-old saplings from a nearby nursery, they take four years to produce berries. A labour-intensive approach to harvesting is better than that used in Brazil, where machines shake the trees. "They take the ripe with the unripe berries," says Li.

Labour-intensive ways have also been best in dealing with bugs that threaten to spoil the coffee crop in Pu'er. A dreaded worm, the stem borer, couldn't be killed by pesticides, which ran off in the frequent summer rain showers. Trapping the bug in artificial ferment tapped off the trees didn't work either. Farmers now control the problem by searching tree bark for eggs and live worms. There's a reward of RMB0.3 for each mature stem burrow collected in jars given to farmers.

The quality and consistency of China's coffee beans have both improved markedly with foreign processing technology and customers. Starbucks and Nescafé both source Chinese beans for domestic and overseas markets. Yunnan Coffee Industrial Corporation (YCIC) processes the region's coffee for domestic ground-coffee sales at a plant in Kunming fitted with German-made machines. The Netherlands branch of Amway currently buys much of YCIC's 2,500-kilogram capacity, while the rest is sold at retail in major cities.

The domestic market, while growing, is price-sensitive. Kunming-based coffee maker Wei Chenkun targets the Chinese coffee drinkers who never make it inside the doors of Starbucks. His company, Yipin, processes Yunnan beans for three-in-one coffee sachets that retail for RMB1. Mixed with milk and sugar, a serving of three-in-one coffee costs RMB1, says Wei, compared to the RMB12 it typically costs to brew a cup of ground roasted coffee.

Yipin is chasing a market in China's smaller cities. "Shanghai and Beijing can already afford big brands," Wei says. Rather than compete with Nescafé in supermarkets, he has 10 salespeople on the road selling directly to internet cafés and company canteens. Companies can rent Yipin coffee dispensers at RMB200 per year. "If the company uses 50 kilos per month, we'll give them the machine for free."

Sweet teeth

Wei got his start on Yunnan government coffee plantations and pilot processing plants, where he worked from 1984 until 1999. Provincial officials sent him to Nestlé's coffee processing plant in Dongguan to learn about coffee flavours. A chemistry graduate from Yunnan Agricultural University, he's tweaking "special technology" to come up with new tastes. "Coffee is like olive oil - you can make it the same as Colombian [coffee] if you use a different way."

Wei vows to beat the big players on taste. Nestlé, he says, hasn't adapted to a local hankering for sweet coffee. "We want to be as big as Nescafé, but it will take time. Nescafé came into China 20 years ago, and it took them 20 years to capture the market. It will take us four or five years."

Yipin's best customers are women between their teens and middle age. Wei equates a city's economic activity with coffee consumption: "In China, tea is about relaxing. Coffee is for energy." Wei's sales are rising twice as fast in eastern cities like Beijing and Qingdao as they are in Kunming. "Koreans in Qingdao drink more," he says.

There's also energy in company exports. Coffee shipped to Malaysia's Engine brand is mixed with Ginseng in 25-gram sachets of VG Power Cappucino, which is marketed as an aphrodesiac. Entering the EU market is a company priority, says Wei, as soon as it can find enough suppliers to produce beans of a consistently high quality.

China will drink more coffee, but tea won't lose market share, says Li. "People who had two cups of tea before who have money now will add one cup of coffee." China's labour-intensive processing makes local coffee beans better than their South American peers, "just not as famous." Li points to a northeast-trending graph of coffee sales over the past five years as reason for confidence. "Coffee is the future for China."