Over the last few years, the specialty coffee industry has evolved tremendously in Malaysia.
While the traditional kopitiams, or coffee shops, have always been a popular choice among Malaysians, the country is seeing a growing number of cafes all across the country.
As a result, coffee import has increased in the country, with an import volume of 1.8 million 60kg bags of coffee beans in 2021. Meanwhile, the way Malaysians consume coffee has also changed.
In order to cater to the more adventurous taste bugs of the country’s coffee drinkers, roasters and cafes are constantly finding ways to offer a wider variety of coffee beans.
However, importing green coffee into Malaysia has been notoriously difficult as it requires traders to be registered, have various trading licences, and adhere to strict regulations.
Read on to find out more about the process and challenges faced by Malaysian coffee roasters.
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What are the import processes in Malaysia?
For most roasters, importing green coffee into Malaysia can be a complex bureaucratic process.
Often, roasters have to go through a lengthy procedure of import permit applications with the multiple government agencies involved. In particular, roasters wanting to import green coffee into the country must first be registered as an importer with the Department of Agriculture (DOA).
Then, following an evaluation process by the DOA, an annual import quota will be provided. Under the 2011 Malaysian Quarantine and Inspection Services (MAQIS) Act, the 1976 Plant Quarantine Act, and 1981 Plant Quarantine Regulations, green beans are subjected to stringent import control.
Under the DOA, the Plant Biosecurity Division is responsible for issuing a separate import permit, which states import condition, treatment, or post-entry requirements. Plant products from countries where the South American Leaf Blight (SALB) is present are prohibited for import.
SALB is a fungal disease that affects rubber trees, inhibiting the plant’s natural rubber production, and eventually, causing the tree to die.
To enter the country, such products must undergo a complete Pest Risk Analysis (PRA), treatment, and quarantine.
For instance, Peru and Ecuador are considered SALB countries. As such, green beans from these countries are seen as high risk, and roasters often find it difficult to import beans for either country.
Furthermore, coffee prepared for import has to follow fumigation guidelines. This is because phytosanitary certifications are required upon arrival in the country for custom clearance.
Separately, the Federal Agricultural Marketing Authority (FAMA) also requires that importers comply with grading, packaging, and labelling regulations when importing green coffee. Specifically, this includes identifying coffee by factors such as its grade, size, and maturity.
At the same time, packaging has to fulfil certain requirements around measurements, weight, and materials. Additionally, it must be labelled with specified details according to these guidelines.
Lastly, MAQIS will perform the final permit and document checks, inspection, and port clearance at entry points into the country.
What is the impact of these rules?
Generally, the import application process is tedious and time-consuming.
Notably, it can take up to three months for medium risk coffees, and six months for coffee that is considered high risk.
As a result, Malaysian coffee roasters have to take into account not only coffee harvest cycles, but the additional time required for import application.
This also means Malaysian coffee roasters have to be strategic with their sourcing decisions to ensure green coffee reaches the roastery when it is at its peak. The inability to do this may affect the coffee’s freshness, which may create an unpleasant consumer experience – potentially tarnishing the brand image.
Green coffee is particularly sensitive to external factors, such as temperature and moisture. Therefore, the time it spends in transit, sitting at the port, or in quarantine, may affect its quality.
Additionally, roasters and importers often get confused with import requirements, as the process is not streamlined. This may lead to coffee shipments being denied upon entry. Non-compliance with import regulations will also result in the confiscation of shipments by the authorities.
Consequently, this may result in substantial financial losses, as well as major disruptions to business operations.
For micro roasters in particular, the fumigation requirements may result in higher importation costs, which makes it a challenge for them to thrive in the industry.
Limited access to a wider variety of specialty coffee beans restricts roasters and consumers’ ability to experiment with different coffees and improve their knowledge and skills. Ultimately, this hinders the ability of the specialty coffee industry to grow as a whole.
What can coffee roasters do to overcome the challenges?
One way roasters can import green coffee into Malaysia is to work with traders and importers in the country. These people have the right expertise to handle the legwork and heavy lifting associated with import.
That said, times are changing and Malaysian roasters are to be less reliant on intermediaries.
Direct trade
Co-founder and head roaster at The Roast Things Ving Lim, says direct trade is one method her company is currently exploring.
“We are working on more direct trade relationships between some of the origins we buy from,” Lim says. “Typically, coffee-producing nations will not have issues with producing the documents required for import application. With higher volumes of trade, we benefit from better logistic costs.”
In addition to the cost-saving aspects and ease of application, direct trade offers many benefits. This includes greater incentives for farmers to improve the quality of their harvest, as well as promoting equality and transparency along the coffee supply chain.
Further, the rise of specialty liberica, as well as locally grown Arabica coffee in the state of Sabah, have also presented an alternative for Malaysian coffee roasters.
Coupled with lowering logistics risks, buying and roasting local beans is an effective way to boost domestic interest. As consumers learn about the potential of local coffee, it may help Malaysian coffees gain exposure on a great scale.
Group buying
In addition to direct trade, Lim explains that group buying is another common practice among Malaysian coffee roasters.
The major benefit to this is that it allows roasters to share the costs of logistics. For micro roasters, who tend to buy in smaller quantities, group buying provides the flexibility to purchase more coffee varieties without taking on exorbitant fees.
Notably, Lim explains that importing costs are determined by the number of origins available in a shipment – instead of the total number of shipments.
Despite the tedious process Malaysian coffee roasters have to go through to import green coffee, it is important to explore other options. Furthermore, it is essential to stay updated on developments in the industry.
The Malaysia Specialty Coffee Association (MSCA) is one of the avenues where roasters can seek guidance from. Particularly, MSCA holds regular webinars to communicate information, including its latest conference to help roasters have an in-depth understanding of the import process.
At MTPak Coffee, we understand the hard work that roasters go through to source, import and roast coffee to deliver the best experience to their consumers. Our range of sustainable coffee bags materials, such as kraft paper, rice paper and PLA, will preserve the freshness of your coffee while maintaining all its unique characteristics.
