Cofco International Ltd., the trading arm of China’s largest food company, is building a soft commodities hub in Dubai as the new location gives it better access to more sugar producing and consuming regions.
The trading hub will give Cofco easier access to sugar producers such as India and Thailand, as well as to deficit areas in the Middle East and Asia. It will also allow for easier dealings with the head office in Geneva and China, where the parent company is located, Bloomberg reported.
Cofco intends to trade sugar, coffee and cotton and its Dubai office will soon move to the Dubai Multi Commodities Centre.
The trading firm has recently reshuffled its soft commodities business. Its coffee team is well positioned in producing countries and growing, and the company plans to trade 5 million bags this year, up from 4 million bags last year.
Coffee is becoming more important in China, traditionally a tea-drinking nation, he said. While estimates vary a lot, the U.S. Department of Agriculture forecasts Chinese consumption more than doubled in the past five years and will reach a record 4.1 million bags this season.