Coffee Industry News

Coffee Price Increase

Coffee price in PNG has increased by 20 per cent this month compared to the same period in the previous year.

Chief Executive Officer of the Coffee Industry Corporation, Mr. Navi Anis said in an interview that the increase is due to low production owing to adverse weather conditions in competing coffee producing countries especially in Central America and Columbia, thus increasing market demand and shifting coffee buyer focus to PNG and other Asia Pacific countries.

He said from the current trend of the world market supply and demand, the prediction is that the price may continue to be maintained or improve for the next 6 months but that depends on the response from the affected producing countries to meet the world market demand.

Mr. Anis said however that there has been generally a steady increase in the coffee price over the last 10 years since 2001 and 2002.

He said CIC has been encouraging farmers to continue maintaining their bond with the coffee tree and those who have heeded to CIC’s advice are now capitalising on the high coffee prices.

“The common and consistent message from CIC to the major coffee growing areas of PNG, is that there is no other major alternative but to maintain constant link with coffee and those who have not, unfortunately could be missing out, as their chance is limited,” said Mr. Anis.

He said, CIC cannot stop farmers from switching from coffee to vegetables cultivation during off coffee season periods, however, considering various factors including, perishability, and market availability of vegetables, there are more risks involved with vegetables than coffee.

Mr. Anis further encouraged farmers to be in organised groups to reap maximum the benefits from coffee projects and other opportunities such as the increase in coffee price currently being experienced throughout the country.

Factories around PNG were purchasing Green Bean Arabica Coffee at an average price for A grade at K8.99, X grade at K8.43, PSC-X at K7.83, and Y1 grade at K7.62in June 2010. Whereas in the same month last year factories were buying at an average lower price per kilogram for K7.73, K7.12, K6.72, and K6.51respectively for each grades.

The parchment Arabica coffee was bought between the range of K4.50 to K4.80 per kilogram in major coffee growing provinces for Class One and Class Two was bought at K2.90 to K4.60. Whereas in the same period last year, Class One was bought at the range of K2.80 to K4.20 per kilogram and Class Two was bought at a range of K2.50 to K4.00.

CIC’s Acting Manager Economist Mr. Shane Kewa further supported Mr. Anis and said the increase in coffee price is due to bad weather conditions in major world coffee supplying countries in South America, the 20 percent drop in Robusta Coffee production in Vietnam and the 4.7 per cent drop in the European stock pile.

 

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Updated: August 22, 2011