History of Coffee in PNG
Coffee was introduced to PAPUA NEW GUINEA (PNG) some 120 years ago. It is suggested that it was first introduced to New Guinea by the German administration in the then colony of New Guinea in the last 1800s. Colonial administrative records suggest that it was grown in German New Guinea at Ralum in the Kokopo district of East New Britain Province (ENBP) by the famous “Queen Emma” (Emma Coe Forsayth) with the aid of a botanist named Richard Parkinson. In Papua, a possible date was given for introduction (Arabica coffee) was1885 by catholic missionaries on Yule Island and Tapini area.
However, first official mention of its presence and growth were in a colonial government report in 1890 and two years later in 1992, coffee was also reported tom be grown in Rigo. By 1897 a coffee estate at Warirata outside Port Moresby was planted, whose tree were suggested to be of the Arabica variety, and in 1899 reported to be flourishing. By 1901 coffee from this area was sent to Australia fetching price between 4 pence and 10 pence per pound.
Most plantings both in German New Guinea and British Papua were, however either on an experimental basis or for botanical/science interest. However, from a commercial perspective, it was in the 1920s that serious efforts were made. It is said that the large commercial Robusta plantation were flourishing in ENBP and Bougainville between 1920and 1930.
In 1928 Arabica was planted at the colonial Department of Agriculture’s experimental station at Wau in Morobe only to be sold (experimental plantation) in 1931to the German entrepreneur in New Guinea, Carl L.B.Wilde.Wilde developed it further, into roast and ground such that by 1935, he was selling roast and ground coffee both domestically and overseas. It was from this Wau Plantation that the Highlands of Papua New Guinea received its first coffee seeds.
It is further recorded that in 1937, a colonial administration’s research station was established at a valley named Aiyura in the general area formerly known as Upper Ramu and it was this station that planted the first highlands coffee from Arabica seeds sourced from the Wau Plantation. Over the years, the station distributed seeds throughout the highlands and it was from these beginnings coupled with the suitability of soil, altitude and climate conditions that the majestic highland country of Papua New Guinea came to embrace the coffee crop and become the major coffee producing region of the country.
The Coffee Crop Today
Today, Coffee is reportededly grown in 15 of the country’s, 19 provinces. In the past the coffee trade had been the major earner of foreign exchange until recently when it was over taken by oil palm exports. Briefly in 2005, better international prices resulted in coffee being the major export earner over Oil Palm.
However, the coffee activity is by far more reaching than oil palm in term of its geographical adaptability, touching and shaping the lives between 2 to 3 million people through its production and export. Almost 50 percent of rural households are involved in the growing and harvesting of coffee with a good number in the urban areas being employed by the activity.
Since the early days the coffee activity, has shaped even the retail, wholesale, transportation, banking and finance sector, and the hospitality and entertainment industries. It would not be wrong to state that the economy of the highlands region depend and continue to do so highly on the coffee activity.
Papua New Guinea produces both Arabica and Robusta coffees with Arabica coffee production having the major share of production of 95% and Robusta the remaining. The Arabica coffee is grown inland at high altitudes, inland Morobe, Eastern, Simbu, and Western highlands province. Robusta covering 5% is grown in the lowlands mostly in the Sepik region of the country with new growth areas are Milne Bay and East New Britain.
The two forms for export for Papua new guinea are green bean and roast & ground, (Roast & Ground account for up to 1% of export) . As at the end of 2008, the number of firms solely exporting green coffee are 16, solely exporting roast and ground, 4 with 1 firm exporting both forms. Exports are graded with the major grades, in descending quality as, AA, A, X, PSC, and Y grades. The first 3 are estate coffee grades whilst the last 2 as smallholders coffee grades; with its top grade PSC standing for Premium Smallholder coffee. However, recently, the country has had other export grades, those of certified organic and Fair Trade labeled coffees. Whilst the quantity is small it is expected that in the near future, export of these coffees will increase.
Prospective Areas for Investment
A prospective area of the coffee business trade that could be increased in scale is the manufacturing or roasting capacity and sector of the industry. Presently, only five manufactures operate, manufacturing roast and ground as well as roast whole whole beans. Whilst domestic sales and consumption is limited, the limits of international sales have not yet been fully tested. There is an opportunity for joint venture partnership and operation.
In addition, opportunity for investment ventures also are supported in quality control and affordable smallholder agricultural supplies with smallholder hand and motorized coffee pulper and spraying equipment being the major needs. Shortage and high cost of proper harvesting and processing supplies in the smallholder sector is a threat to the quality regime of PNG coffee the supply of quality and affordable smallholder equipment and supplies is a present concern.
There is, opportunity for partnerships also in the estate sector in Papua New Guinea. This sector had declined in the past because of a combination of low international price and poor management amongst other matters. Currently, the coffee industry authority CIC LTD is focused on revitalizing this sector, which in the past had propelled the country to the international coffee trade stage as a quality producer of superior estate coffees. The industry authority is encouraging innovative business strategies in this sector that may be fostered through joint-venture partnership that will commence with rehabilitation and financing.
Export Volume in 1998 and 1999 has been the highest so far at 1,348,000 and 1,320,000 bags; the high volume was possible through high production levels in those years. From 2000 up until 2004, exports have averaged 1,078,000 bags. In 2005 due to the favorable international prices for coffee and the year being a’ on-year’ in coffee growth, export again increased, though not to the ‘98/’99 level, but up to 1,200,000 million bags.
Production declined, however, hence exports in 2006 fell to a 14-year low. The decline in export was obviously constrained by a ‘off-year’ production and further compounded by rehabilitation of tree stocks in the industry that was triggered by high prices, export was eventually leveled at a mere 849,000. In coffee year 2007, however production and exports returned to previous levels of 1, 116, 866 and 1, 109, 821 respectively. Market wise, prices have been high since the last quarter of 2004 and had continued into 2008. Production in 2008/09 has been subdued to 1, 043, 659 bags and export at 984, 658 bags. However, it would seem that production has returned to normal levels again.