Coffee: a major PNG export

Welcome,

Coffee is one of Papua New Guinea’s major agricultural commodities, with exports worth 927 million kina (US$433 million) in 2011—a huge increase on 2010. Two varieties are grown: robusta in the coastal areas and arabica in the Highlands.

Credit: Pacific Islands Trade and Invest

Credit: Pacific Islands Trade and Invest

There are approximately 64,000 hectares under coffee across 14 of PNG’s provinces, most managed by smallholders. It is estimated that 2.5 million Papua New Guineans rely on coffee as their main source of income.

The Coffee Industry Corporation provides statutory oversight of the industry, as well as research and grower support. It is also empowered to buy and sell coffee. PNG produces roughly one million bags of green coffee beans annually (annual world production is currently about 125 million bags). It exported coffee to 29 countries in 2006, with the major coffee markets being Germany, the United States, Japan and Australia. PNG’s slightly fruity beans attract a reasonable price, typically slightly below the price for Columbian coffee.

Credit: ADB/Ian Gill

The key coffee-producing provinces are Western Highlands and Eastern Highlands, which between them account for more than 80% of production. Goroka in Eastern Highlands Province is the major commercial centre for coffee, and the headquarters of several of the larger coffee exporters and the Coffee Industry Corporation.

The three major international coffee companies operating in PNG are Switzerland’s Ecom Agroindustrial Corporation Ltd (represented in PNG by Monpi Coffee Exports Ltd) and Volcafe (local subsidiary PNG Coffee Exports), and Germany’s Neumann Kaffee Gruppe (local subsidiary New Guinea Highlands Exports).

Organic certification is considered the quickest and easiest way of adding value to the same coffee.

Key local coffee producers include Carpenter Estates (a subsidiary of the diversified W R Carpenter Group), Coffee Connection, and Kongo Coffee in Simbu Province.

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Because of its longer packaged life, most coffee from PNG is exported as green beans. However, according to the Coffee Industry Corporation, there are seven companies that roast beans in PNG. These include Carpenter Estates, which markets its premium roasted coffee under its Sigri brand, and Kongo Coffee.

Credit: MCPNG

Organic certification is considered the quickest and easiest way of adding value to the same coffee. This is providing an opportunity for companies such as Coffee Connection to market PNG coffee as organically certified. This certification, plus the sale of coffee under the internationally recognised Fairtrade brand, has the potential to enable growers to achieve higher incomes.

The coffee sector does face challenges, however. PNG’s strong tradition of customary land ownership mitigates against large plantations with their better economies of scale, while poor roads and high rainfall in PNG’s Highlands region often prevent the coffee crop getting to port (usually Lae) in a timely manner. Also, the requirements of organic certification can often be beyond the capacity of smallholders. The coffee export business is also a cash-intensive business, with most companies advancing cash payments to their growers to ensure supply.

First published in Made in PNG 2012

Comments

  1. justin says

    organic coffee production is reducing in supply at the moment. if there are good price attached to the export/ good price from importers to the organic coffee, can be incentive in some form available/establish to encourage local farmers to invest and increase organic production.

  2. parasi paul giwe says

    need supply chain of goroka coffee,include the production of coffee to the consumer and every value adding activities,labeling,packaging,grading,.and also the major exporters of goroka coffee

  3. Much needed information.please more info

    Monica kale.

  4. Potaisa Hombunaka (Mr) says

    Informative article. Much appreciated.

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