Coffee demand to jump in China, India - illycaffe CEO

A man drinks coffee at a coffee shop in Mumbai May 9, 2006.

LONDON (Reuters) - Coffee consumption in China and India is expected to rise sharply in coming years due to promotional campaigns and rising incomes, Andrea Illy, chairman and CEO of Italian coffee group illycaffe, said on Friday.

Illy, who leads a committee of the International Coffee Organization (ICO) to promote coffee, said China will rise to become one of the world's top five consuming countries.

Coffee demand in China is just above that of Portugal, a country with a fraction of its population.

Illy said globalisation and rising incomes, combined with marketing drives, would propel coffee drinking in countries such as China and India where coffee is not part of traditional culture.

Illy said coffee consumption was likely to grow globally by between 2 and 3 percent over the next decade, as it has done over the past decade.

"Coffee consumption will most likely grow proportionately to the increase in disposable incomes," he told a news conference.

Illy said that in China, coffee consumption was fashionable among young people, who would drink an occasional cup in coffee shops, and was centred in urban areas.

In an interview with Reuters, he said the rapid emergence of mega cities in China would create business opportunities for groups like illycaffe to boost coffee drinking, typically in Italian style, in the form of cappuccino or espresso.

Trieste-based illycaffe exports high quality coffee blends to countries around the world.

"Globalisation is bringing cross-fertilisation," Illy said. "The Asians are consuming more Western products, and the West are consuming more Asian products.

"In one generation, China will become one of the five most important coffee-consuming nations in the world."

Illy said that coffee drinking was taking place primarily in coffee shops and restaurants in Chinese cities, and would eventually filter to increased consumption in homes.

Illy anticipated that coffee consumption would also jump in India, the world's second most populous country after China, as promotional campaigns gathered momentum and incomes rose.

Starbucks Corp will open its first coffee shop in India by the end of October, John Culver, President, China and Asia Pacific, said on Friday, in the latest delay to a much- hampered entry into the country.

Illy was speaking on the sidelines of ICO meetings in London this week.

(Reporting by David Brough; editing by Jason Neely)