PNG, China Sign Historic Agreement for Coffee Industry

By: Roselyn Erehe April 22, 2024

PNG Minister for Coffee, Hon. William Bando, CPA, LM, MP

The recent signing of the Protocol on coffee exports to China during the official visit of His Excellency Wang Yi, the Minister for Foreign Affairs for China, marks a significant milestone for Papua New Guinea's coffee industry and agriculture sector.

The momentous occasion on the 21st of April signifies an historic moment in the relationship between PNG and the People's Republic of China, as the phytosanitary protocols were signed to open the Chinese market to PNG's unroasted coffee beans.

It reflects years of negotiation efforts by PNG Prime Minister Hon. James Marape and Minister for Foreign Affairs, Hon. Justin Tkatchencko, aimed at bridging the gap between the two nations' systems.

Traditionally, PNG's coffee has been primarily traded with Western societies, with Asia serving as the shipment port.

However, with the efforts from Prime Minister Marape to promote and develop the agriculture sector, the Memorandum of Understanding (MOU) with China heralds a promising future of trade and economic partnership between the two nations.

PNG boasts a global reputation for its distinct coffee, with exports reaching over 34 countries worldwide.

Despite producing less than 1 million green bean bags annually, PNG’s presence in various markets underscores the unique position its coffee holds among enthusiasts globally.

PNG Minister for Coffee, Hon. William Bando, CPA, LM, MP, in a recent statement, assured his Ministry’s commitment in supporting the coffee industry.

“My Ministry will work to enhance the entire coffee value chain, from farm to cup, by investing in infrastructure, technology, and capacity-building initiatives that improve productivity, quality, and market access for coffee farmers,” Hon. Bando said.

From 2021 to 2023, PNG has witnessed remarkable growth in its coffee export sector, particularly in exporting to China. The cumulative value of coffee exported saw over 50,651 bags (3,039 tonnes) shipped to China, bringing in an impressive K42,104,493 -- reflecting the dedication of local farmers and exporters.

“This achievement is a testament to the hard work of our local farmers and exporters, where 58% out of the 32 registered exporters have ventured into the Chinese market, diversifying and expanding their horizons,” Minister Bando said.

The surge in exports to China, reaching 35,020 bags (2,101 tonnes) in 2023 alone, demonstrates the increasing demand for PNG coffee in China, attributed to the unique taste and high quality of PNG coffee, making it a preferred choice among the Chinese.

Minister Bando confirmed that the figures presented relates to PNG coffee entering China, not directly but through different ports such as Hong Kong, Malaysia, or Singapore, as PNG had no protocols for direct entry of coffee. It will be another chapter when coffee can be now shipped direct to China.

He stated the challenges the PNG coffee industry faces, adding: “The signing opens up market for our products, but it is a challenge to our coffee industry to produce more as direct exports will obviously mean more direct sourcing of PNG Coffee.”

“Further, we can expand our roast and ground coffee trade with the direct flights between PNG and China that is expected to be three flights weekly. We need to put more roast beans and ground coffee on these flights to China apart from the unroasted or green bean exports on ships.”

He said efforts will be directed towards enhancing the entire coffee value chain, from farm to cup, through investment in infrastructure, technology, and capacity-building initiatives. Research and innovation will play a crucial role in driving growth and competitiveness in the coffee sector, the minister added.

PNG also seeks to explore trading opportunities with China for other commodities such as cocoa, rubber, coconut, copra, tea, and oil palm, emphasizing the commitment to agricultural development.

However, the minister said the success of this agreement hinges on the continued dedication of farmers, growers, and industry stakeholders to increase production and productivity while maintaining the unique taste and preferences that distinguish Papua New Guinea coffee on the global stage.

Hon. Bando added: “My appeal to all Coffee Industry Corporation Board and staff and Agriculture Officers throughout PNG to get moving on the ground to motivate, encourage and point our producers to getting our hands dirty and this will create employment and income earning opportunities and in moving our industry forward as well as our economy.  We must produce more coffee and process at affordable costs for our own consumption and to sell to the world that unique PNG brand.”

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