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The General trend of the Coconut Industry in Papua New Guinea (PNG) in terms of its contemporary status, contribution to the PNG economy, exported coconut products and potential investment opportunities

The coconut industry over the years and at present remains a viable industry by contributing to the national economy through the provision of employment (both formal & informal) and export earnings from the main coconut products (copra, crude coconut oil (CNO) and copra meal). According to PNG National Census 2011 a total of 440,328 households have been engaged in coconut farming either for consumption or for sale as a cash crop commodity. This implies that coconut sustains the livelihood of an estimated 2.6 million people out of the total population in the country. From the total households engaging in coconut activities, 29% (134,655) were involved in cash generating activities while 71% (329,673) were engaged for their own use. The industry employs an estimated 20,000 people either on full time or part time.

On average the industry contributes K126.5 million to the national economy through the export revenue collected from the coconut products.  The  Kokonas  Indastri  Koperesen  (KIK) estimate that over 70% of this is annually transmitted directly to smallholder copra producers and 30% transmitted to plantations. In 2017 coconut industry contributed over K177 million for 43 000 tones of copra, 16 000 tones of CNO and 90 000 tones of copra meal. A slight increase from 2016 total export revenue (K130 million) due to price change in the global vegetable oil market.

About 381 million nuts are consumed and used for various purposes daily, which is worth K381 million (Average rate: K1/nut) annually in the country. In terms of world coconut product trade, PNG’s production and exports remain at an average of about 1.1% of the world market share. Two major traditional copra export destinations for PNG has been the Philippines and Australia. However in 2017, the major copra destinations for PNG were Philippines 77%, Bangladesh 11%, Singapore 5%, Australia 4% and Malaysia.

Presently, the major copra producing provinces in PNG are; East New Britain, Autonomous Region of Bougainville (AROB) New Ireland, West New Britain, Milne Bay and Madang. These provinces are currently engaged in exporting coconut products. Other potential copra producing provinces include Gulf, Central, Oro, Morobe, East Sepik and Manus. However, due to lack of market accessibility, farmers have abandoned copra production.

There are more than 20 registered exporters, 3 coconut oil mills and 1 bio-diesel plant in PNG. However only less than half of the total exporters have been actively exporting main coconut products, of which 64% are international investment companies and 36%  are  locally owned companies. The names of the exporters and their contacts can be found on  KIK website (http://www.kik.com.pg).

There are three (3) types of licences which are approved and issued by KIK to interested companies or businesses for trading coconut products. Following are licence names and respective fees: Buying, K1,000; Processing, K2,000 and Exporting K2,500. An additional K100 is applied as licence processing fee and the respective licence fees are same for renewal in every year.

Apart from the PNG’s main coconut exports (Copra, CNO and Copra Meal), there are greater and untapped potential investment opportunities lie in value added products such as desiccated coconut, virgin coconut oil (VCO), coconut oil bio- fuel, coconut shell charcoal, coconut coir fibre and coconut timber. Currently, over 15 Micro, Small, Medium Enterprises (MSMEs) are involved in production of mainly VCO. In 2015, only 3 MSMEs have exported just over 100 tones of VCO to overseas niches markets.

In every year PNG affiliates to the international and regional coconut bodies to share various matters of common interest, learn from other countries experiences, and access technical and funding support for coconut development in PNG. Two of such main bodies are (1) International Coconut Community (ICC) (formally, Asian and Pacific Coconut Community)  and (2) the International Coconut Genetic Resources Network (COGENT).

The industry in general has huge untapped potentials in terms of industry expansion and investment opportunities through product diversification. KIK at present is unanimously encouraging the following in the coconut industry. Corporate investment; promote entrepreneurship for smallholder coconut farmers and traders; promote downstream processing of coconut products for value- addition; formation of cooperatives by coconut farmers as a cost minimisation option and to revive dormant plantations and promote replanting of coconuts; effective research to address invasive pest and disease, and climate change; efficient delivery and implementation of new technologies and research findings to farmers, MSMEs and traders.

Proposition by KIK to undertake smallholder and plantation appraisals for sustainable long- term development for the benefit of coconut farmers and coconut-based enterprises await appropriate funding for implementation.

For more information regarding the current Buyers, Exporters and Processors please Refer to Exporters List.