Coffee Industry News

Coffee Prices not set by CIC (30/08/11)

The coffee price in PNG is not set by the Coffee Industry Corporation Ltd but by the forces of demand and supply in the world market.

This was the message given to the Apo Co-operative farmers operating under the CIC’s piloted Coffee Credit Guarantee Scheme (CCGS) during their meeting in Goroka recently.

CIC’s Senior Socio Economist, Mr. Kessy Kufinale informed farmers that the International Coffee Exchange (ICE) in New York sets the price that is negotiated between buyers and sellers on the floor of the exchange.

The price of coffee reached almost K15.00 for top green bean and about K8.00 for top parchment locally in April this year, but have since fallen to about K8.50 and K5.20 for each coffee respectively in June , raising many questions especially from smallholder farmers.

Mr. Kufinale said world exports were picking up resulting in the fall in price of coffee but is still at a higher level. The current high price of coffee is due to shortage of good quality coffee on the world market, low world stocks and strong demand. These factors will continue to support price in the short term.

He explained that PNG only produces one percent of the worlds coffee and is not in a position to bargain on the price however, PNG farmers get from 60 to 70 per cent of the Free On Board (FOB) or export price of coffee to overseas markets, which is comparable or better than their counterparts in other countries.

The farmers were also enlightened with business opportunities and experience from the Eastern Highlands Provincial Division of Commerce Advisor, Mr. Lavet Ganino, and Managing Director of Agri-Business Institute, Mr. Stephen Rere.

 

 

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Updated: October 5, 2011