Swiss coffee merchant Volcafe is forming a joint venture with Simao Arabicasm Coffee (SACCO) to export coffee beans from China.
The joint venture Yunnan Volcafe will source coffee beans grown in Yunnan province.
The new entity will source and export beans to international coffee manufacturers.
SACCO is involved in shipping of beans to European markets including Switzerland and Germany.
According to Volcafe, coffee beans output in Yunnan region is usually more than one million 60-kg bags, which is equivalent to Ecuador's annual output.
China, however, represented less than one percent of global coffee production of 145.2 million bags during 2013-14, Reuters reported.
Volcafe, which is the coffee division of agricultural commodities company ED&F Man, is the first trader to set up local operations in China.
ED&F Man Global Commodities head Jan Kees van der Wild said: "Chinese mild arabica is still relatively new to the world coffee scene, but its improving consistency means it is rapidly growing in acceptance with global roasters."
Other coffee majors such as Nestlé and Starbucks have also invested in farms and growers to boost arabica beans supplies
