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Cocoa Sector to Enhance Standing in International Markets
by PNG Business News - July 02, 2021
Photo Credit: Paga Hill Estate
According to the Pacific Horticultural and Agricultural Market Access Plus Programme, the country's cocoa sector is poised to enhance its standing in international markets, due to recent investment aimed at decreasing smoke taint and increasing cocoa quality (Phama Plus).
The PNG Cocoa Board is collaborating with Phama Plus to improve possibilities for PNG's cocoa-growing communities.
“Through the support of Australia and New Zealand, Phama Plus has been in collaboration with the PNG Cocoa Board since 2015, providing training in innovative farming practices that maximise profitability and income and maintain a sustainable value chain to improve international competitiveness for PNG sourced cocoa,” Phama Plus said in a statement.
“PNG is a longstanding producer of high-quality cocoa on the global market; however, due to smoke taint affecting the flavour of cocoa, PNG’s fine flavour status was recently reduced (from 90 percent to 75 per cent) by the International Cocoa Organisation.
“This impacted the premiums paid for cocoa and influences the value of trade from international niche and speciality cocoa buyers.
“Recently, 57 local farmers and their team leaders in Lower Watut, Morobe and Aitape, West Sepik attended training sessions delivered by Cocoa Board officers on the correct post-harvest practices to better understand key stages of primary processing of cocoa, including harvesting, transportation, fermentation, drying and storage.”
The National (30 June 2021). “New initiative to improve cocoa quality”.
PNG Business News - March 11, 2021
Government Rolls Out K19 Million to Support Cocoa
The government has so far put in K19 million for cost support to cocoa. According to Agriculture and Livestock Minister John Simon, the high-quality cocoa needed to be produced for the price to stay at K3 per kg. He added that last year, it was K10million and this year, K9 million as an incentive to growers to increase production. He said that what was being rolled out now was the K10 million from last year. “This year, the Government has allocated another K24 million (for agriculture price support), of which we have given another K9 million to cocoa, which makes it K19 million,” he said. “This money is for you (cocoa farmers). The money, however, will only be paid when you bring out your cocoa and weigh it on the scales.” He added, “I want to see men and women in the villages who are involved in cocoa, I want to visit them, I want to see that their cocoa gardens are clean, I want to see a good production of cocoa, I want to see happy farmers who are receiving money.”
PNG Business News - June 07, 2021
K1.2 Million Set Aside For Cocoa Development
In Bogia, Madang Province, K1.2 million has been set aside for cocoa development. This money came from the PNG Cocoa Board, which contributed K600,000, and the Bogia District Development Authority, which contributed another K600,000. Boto Gaupu, the chief executive officer of the Cocoa Board, stated that they are willing to collaborate with the Bogia district to grow coconut and cocoa. “PNG Cocoa Board is serving the same clients and as to the district by working with the farmers at the village level and revive cocoa which was one of the commodities grown in the area for many years,” he said. “We are committing K600,000 to the district of which K100,000 will be initially presented for the purpose of reviving cocoa and other cash crops in Bogia, Madang Province.” The district is also dedicated to working with any government and non-government organizations, according to Bogia MP Robert Naguri, and the cocoa board's involvement will go a long way. He claims that this will assist more than 100,000 people in the provinces of Bogia and Madang. “We are also committing K100,000 through the district development authority and that will help support the initial work to be carried out in the district.” He stated that this is the start of a new path for Bogia, and that the resuscitation of cash crops such as coconut and cocoa in the area will pave the way for socio-economic growth. Reference: Tom, Patrick. Post-Courier (2 June 2021). “K1.2 Million For Bogia Cocoa Development.”
PNG Business News - July 22, 2021
Oil Search Considering Merging with Santos
Santos, an Australian oil firm, announced its plan to combine with Oil Search Limited. Santos proposed a non-binding indicative merger last month with the goal of making the two companies the regional energy champions. The proposed merged entity has a market capitalization of A$22 billion (K56 billion), putting it among the top 20 ASX-listed companies and the top 20 global oil and gas companies. This means, among other things, that the merger will have a diverse portfolio of high-quality, long-life assets spanning Australia and Papua New Guinea, a solid balance sheet with ample cash to support expansion choices, and an investment-grade credit rating. The merger plan, if approved, would be conducted through a Scheme of Arrangement in which Oil Search shareholders would receive 0.589 new Santos shares for each Oil Search share held, according to Santos in a market disclosure to the Australian Stock Exchange. Following the scheme's acceptance, Oil Search shareholders would control 37% of the combined company, while Santos shareholders would own 63%. Based on Santos' closing price on June 24, 2021, the ownership ratio suggested a transaction price of A$4.25 (10.92) per Oil Search share. This was a 12.3% premium to the Oil Search closing price of A$3.78 (K9.72) on June 24, 2021, and a 9.8% premium to the Mubadala block trade selling price of A$3865. (K9.92). Kevin Gallagher, managing director and chief executive officer of Santos, said the merger will bring more alignment to PNG, allowing for the development of important projects such as Papua LNG, as well as the creation of new employment and support for the local economy. Santos, according to Gallagher, has proposed a true merger in which ownership of the combined firm is based on proportionate contribution and value. “The strategic rationale for a merger is clear and offers superior value to Oil Search shareholders rather than continuing on a standalone basis. “Santos continues to believe that the Merger Proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders.” Oil Search stated in its ASX market update that it is open to receiving and engaging with any proposal that is in the best interests of its shareholders. While the company's board of directors agrees with Santos that combining the two firms makes strategic sense, the conditions must be fair to the company's shareholders, which the terms proposed by Santos are not. Despite Santos shareholders holding 70% more shares than Oil Search shareholders, Oil Search maintains that the proposed conditions provide just a 6.8% premium based on Friday's closing share prices for Oil Search and Santos. According to the firm, no such proposal has been made at this time. Reference: Post-Courier (21 July 2021). "Oil Search Open To Merger with Santos".
PNG Business News - July 21, 2021
Study Says Sweet Potato Growers Have Received Significant Insights into Customers Buying Habits
In Papua New Guinea (PNG), sweet potato (kaukau) growers have received significant insight into customer buying habits, which is assisting them in identifying new market possibilities. The recent market analysis, which was supported by the Papua New Guinea-Australia Partnership and conducted by the Australian Centre for International Agricultural Research, revealed that an increasing number of consumers in Port Moresby prefer to buy fresh produce from supermarkets, citing convenience and safety as reasons. While this trend may result in fewer consumers at conventional farmer markets, PNG and Australian experts believe it may open up new marketplaces for rural people. “Farmers are looking for stable markets where they can receive more consistent prices for better-quality produce,” said Professor Philip Brown from Central Queensland University (CQU), who is leading the research project. “The research shows that consumer behaviour is likely to support an expansion in the supermarket sector in large urban centres and this is positive news for the farmers. This could allow commercial focused farmers to secure more stable market access.” The study of 353 customers was conducted as part of ACIAR-funded sweet potato research sponsored by CQU and the PNG National Agriculture Research Institute (NARI), which aims to improve sweet potato value chains by increasing the quality of harvested roots. Sweet potato quality and production are improving, resulting in increasing supplies to retailers eager to provide better fresh produce. “The project, with support from the Fresh Produce Development Agency and NARI, is helping farmers to build their business skills and connect with emerging supermarket opportunities,” said Professor Brown. Kirt Hainzer, a CQU researcher who collaborated on the survey alongside NARI researchers, said it was the first study to look at customer behaviour and see what role stores may play in the development of PNG's commercial sweet potato sector. “The research sought to better understand and compare how consumers buy staples from open markets and supermarkets and to explore the preferences for purchasing staple foods as supermarkets increase the availability of convenience staples like rice,” said Hainzer. “Although expanding formal sales represents a huge step forward in developing a commercial sweet potato industry, continued research on consumer preferences and the market for fresh produce will help better understand trends in staple food purchasing and what market opportunities exist for growers.” With over a hundred kinds of sweet potato in the nation, NARI economist Raywin Ovah said the study sought to find out which of these customers preferred. “Not all the varieties are preferred from a consumer point of view. There are only a few that consumers want to be based on the taste or health properties and that is what we want to also find out. Farmers can be provided with that information, so they produce those varieties that the market wants.” One of five initiatives under the Transformative Agriculture and Enterprise Development Program is a project to increase commercial sweet potato production and commercialization in the PNG highlands. The ACIAR program, which is funded by Australia in collaboration with the government of Papua New Guinea, aims to improve the livelihoods of rural men and women through private sector-led development, increased agricultural productivity and quality, and the development of individual and institutional capacity. Reference: Loop (20 July 2021). “Study looks into sweet potato industry”.
PNG Business News - July 21, 2021
Garry: MRA Evaluating K50 Billion Worth of Investments
According to managing director Jerry Garry, the Mineral Resources Authority is evaluating more than K50 billion in investments in the country. Wafi-Golpu, Frieda River, and Woodlark are among them. “We are also looking at the Central Lime and Cement,” he said. “If that project comes on-stream, it will be one of the first industrial mines ever built in the country.” Garry was speaking at a Port Moresby consultation session on the Mine and Works (Safety and Health) Bill 2021. PNG, he added, was home to some of the world's largest mines. “We have grown from strength to strength,” he said. “If you compare the Bank of PNG statistics, the mining sector alone, in terms of production, has exported over K17 billion in 2020 and 2019. “So it’s a huge industry that we are trying to regulate and manage.” Garry expressed gratitude to the industry for making safety a primary priority. “They have been taking health and safety at the workplaces very seriously,” he said. “We must not only consider (the workers) and the environment but also people living around the (areas) we operate in. “And if we are using any hazards, we must also take responsibility.” The newest mining methods in Wafi-Golpu, known as block cave mining, are one of the new things to expect, according to Garry. “New mining hazards will come with this new mining method,” he said. Reference: The National (20 July 2021). “Authority assessing investments worth K50bil”.