Minister for International Trade and Investment, Hon. Richard Maru is calling for establishment and commercialization of the kava industry in Papua New Guinea (PNG). Minister Maru made this call after learning from the two Fijians who attended the 14th World Indigenous Business Forum in Port Moresby recently that the demand for kava in Fiji and the Pacific had outgrown supply.
“The cultivation and sale of kava both in domestic markets and as a processed export product is an important source of income for thousands of smallholder farmers and their families across the Pacific. Green liquid, dried and powdered kava has progressed from a traditional and customary beverage over the years to a source of community livelihoods, and now a business for the pharmaceutical industry and social gatherings. The commodity is known to have medicinal capabilities including relaxant. Because of its associated relaxing benefits and the removal of trade restrictions in many countries, the demand for kava has increased and thousands of smallholder farmers across the region are now engaged in kava production. The commodity has become one of the main sources of economic importance to many Pacific Island countries and as a significant contributor to GDP, foreign exchange earnings, and balance of payments through exports for some countries,” said Minister Maru.
According to a recent Pacific Horticultural & Agricultural Market Access Program (PHAMA) report, in Fiji alone, 1 in 8 rural households are involved in the crop’s cultivation, with a further 3,000 households earning an income through kava trade and retail operations. Whilst, in Vanuatu, an estimated 30,000 households are involved in its cultivation with a further 3,000 earning an income from the kava trade and retail operations.
“In 2020, Fijian kava exports were worth over A$43.6 million and in 2019, Vanuatu’s kava exports were worth A$48.4 million, with these figures set to grow in coming years. While some of these exports are to other Pacific Island Countries, larger markets include New Zealand, New Caledonia, Europe, and the United States, partly due to the large Pacific Island communities living there. The bulk of this trade is associated with selling kava as a beverage, with a growing quantity being exported as an ingredient, for nutraceutical and pharmaceutical products. The growing popularity and demand for kava has resulted in a price hike in recent times. The increasing price has created local and overseas investment opportunities for the cultivation and propagation of kava by local communities across the region. Kava has fast become a thriving cash crop for local farmers, primed for further growth. With the global kava market expected to exceed US$210 billion (AUD$309 billion) by 2026, the projected impact of the industry is significant. Kava has led to the empowerment of local communities through the supply chain, creating sustainable incomes, and improving livelihoods. As import regulations ease and international demand grows, exciting opportunities for Pacific Island businesses to enter new markets grow,” said Minister Maru.
“Papua New Guinea has the potential to become the biggest producer of kava in the world if we establish kava as an industry and undertake multicropping with kava being planted under the cocoa trees to fully utilize the land so our farmers can make money from both cocoa and kava using the same land. This is one industry that is ready to boom,” added Minister Maru.
The Ministry and Department of International Trade and Investment will be working very closely with the Ministries and Departments of Agriculture and Commerce and Industry, and the National Trade Office to work on immediately establishing the kava industry in PNG.