Papua New Guinea must take advantage of growing global coffee consumption, say leading exporters

February 8, 2017

26 Oct 2016 by

Papua New Guinea’s coffee industry needs to capitalise on the growing global demand for coffee, industry exporters and promoters tell Business Advantage PNG. They believe production improvements are essential to ensuring consistent quality.

coffee roastingThis year will be a good year for coffee production, according to Joeri Kalwij, Manager of Monpi Coffee Exports, one of PNG’s major coffee exporters. He tells Business Advantage PNG that there is a good chance one million bags will be exported this year, although consistency of supply cannot be guaranteed.

‘The odd positive year is an exception,’ he says. ‘The well-quoted phrase that PNG produces, on average, 1 million bags is ancient history. If we average 800,000 bags a year, we’ll be doing well. Production per hectare on average is very low.’

Monpi Coffee Exports' Joeri Kalwij.

Monpi Coffee Exports’ Joeri Kalwij.

Kalwij cites four major reasons: poor training of farmers and the state of the trees; bottlenecks at ports due to lengthy and complex export bureaucracy; substandard mills; and the country’s declining infrastructure.

Infrastructure

‘The decline in infrastructure and services can be seen when a road is washed away, or a bridge has collapsed in the more remote areas,’ says Kalwij.

‘It doesn’t get fixed in the same season. That means that a lot of farmers who grow coffee have a harder time bringing their coffee to market.’

Major trade and development organisation Fairtrade Australia and New Zealand works with over 6,000 coffee farmers in Papua New Guinea, including the 2,600-member Highlands 0rganic Agricultural Cooperative (HOAC). The Cooperative is investing into improving local infrastructure and bucking local trends with production increasing by 350 per cent over the last 10 years.

Fairtrade Australia and New Zealand CEO, Molly Harriss Olson tells Business Advantage PNG poor infrastructure has two major impacts.

‘A lot of the country’s rural infrastructure, such as roads and bridges, has deteriorated, so we can’t easily access many of the ideal coffee growing regions.

‘This is limiting the national coffee production. Delays in transport also impact the quality of coffee and therefore (there are) lower prices,’ she says.

Export bureaucracy

Fairtrade's Molly Harriss Olso.

Fairtrade’s Molly Harriss Olson.

Kalwij praises the US$50 million World Bank-funded Productive Partnerships in Agriculture project (PPAP), which trains farmers and aims to rehabilitate ageing trees. But he says some of that money could be directed towards improving the export process.

‘Mistakes are made and it takes a long time, often weeks, to get a set of export documents ready for your clients. That is where the reputation of PNG as an exporting nation is at stake.

‘We need to do away with the problems in getting export documents ready. I know it’s not a sexy subject but it’s a headache for every exporter.

‘If we could achieve this, the exporters would buy more and we could export more.’

‘Why don’t we train coffee growers better? It’s a negative vicious circle with regards to quality.’

Kalwij says it is unclear how much of the crop does not reach the market.

‘We simply do not know. Export figures are just that: a mere figure that does not give you the complete story of how the industry is going. It can be a dangerous figure that gives a false sense of security when misinterpreted.’

Mill quality

Kalwij notes there are also quality issues. Some coffee may be under-grade, or may be from past crops. ‘We are devaluing our coffee,’ he says.

‘A bucket of random cherries at a random wet mill will be any colour, from green to dark red and everything in between. Why don’t mills reject unripe beans? Why don’t we train coffee growers better? It’s a negative vicious circle with regards to quality.

‘We will never be a Brazil or a Vietnam. But do we need to be?’

‘I see this, though, as an opportunity where I can work my supply chain—with a lot investment, a lot of time, a lot of dedication—to improve quality.

‘It’s our job as an industry to make sure the growers appreciate coffee as a cash crop and know how to treat it well and maintain the quality after harvest. Sadly, it’s pretty much left up to exporters to ensure consistent quality.’

Marketing

Fairtrade’s Harriss Olson says demand for coffee is growing across the globe.

‘It’s projected that by 2020, Australians will be drinking 4.5 billion cups of coffee each year, so the demand is certainly growing in Australia, as it is globally.

‘This growth in demand, coupled with PNG’s close proximity to Australia, provides a tremendous opportunity for PNG coffee growers.’

Dutch-born Kalwij says demand for PNG coffee will always outstrip supply. He adds that the country currently provides about one per cent of the global coffee output and is unlikely to reach double digits.

‘We will never be a Brazil or a Vietnam. But do we need to be? We can create specialty coffees. We can create quality by being more hands-on with the farmers.

‘People will stand in line to buy a cup of PNG coffee–if it’s marketed as PNG coffee. PNG can cater for all ends of the spectrum: high end specialty and a solid quality bulk volume.’

Source: Business Advantage PNG

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