Welcome From The CEO
It gives me pleasure to report on some of the work CIC has accomplished in 2015 and also highlight some of the ongoing and planned events for 2016.
Coffee production in the last couple years has been on a downward trend. The 2015 production totaled 44,030 tons, 7% lower than 2014 production level. While expectations in 2015 have been high given the smaller crops in the last three years (2012 – 2014), the prolonged El Nino induced drought and frost which occurred during crucial coffee period (Apr – Nov) causing stress on coffee trees resulting in dieback of a lot of coffee beans that affected coffee production.
The low production showed PNG exported volume slumped by almost 26% below average export of 1.1 million bags from 2013 to 2015. Last year, PNG exported 42,689 tonnes at a total value of K393.55 million. Exports in the last three years (2013 to 2015) declined by 24% in comparison with the exports from 2010 to 2012 period. The decline in exports attributed to low production witnessed in the period.
The weighted average export price for 2013 – 2015 averaged K8.45 per kilogram gbe (green bean equivalent), representing a decrease of 20% on 2010 – 2012 weighted average price. The combined decline in export volume and valued in the period resulted in a 39% decline in receipts to K1.18 billion compared to 2010 – 2012 period.
The continuous declining trend in coffee production could be attributed to many factors (natural, social, economics). However, it is so obvious that many of the coffee trees are over the age of productivity (above 25 years) and are senile trees. Aging coffee trees is one of the problems leading to decline in productivity. It is in the best interest of growers, exporters, processors, traders, buyers, associations, and marketing groups’ e.t.c, to support nurseries program. One way or another we all benefit. We must start to invest if we all have interest in coffee and justify why we are the players in the industry.
CIC is working with organized grower groups to address these problems. CIC is establishing nurseries jointly with grower groups and districts to distribute seedlings to farmers. As much CIC under its ongoing partnership program is working with interested districts to deliver extension services directly to farmers.
CIC partnership program is also extended to plantation sector. Under a tripartite agreement CIC had brokered in 2014 for an Investor Financing Agreement (IFA). This partnership program was trialed out between Anego Coffee Plantation, Outspan (exporter) and CIC. The results look promising for the future prospects. The partnership arrangement has transformed the plantation into a new look.
I encourage more of such tripartite partnership arrangements to rehabilitate all the rundown plantations in all the coffee growing provinces, as after all, the end result would be a win-win situation.
CIC’s third National Coffee Cupping Competition (NCCC) would be held again this year. The NCCC concept is to assist coffee growers and cooperatives maximize benefits under CIC’s “tree to cup” policy, which CIC emphasizes on coffee growers producing quality coffee and sell direct to overseas markets.
I wish all coffee industry stakeholders and including CIC employees a happy 2015/16 coffee season and look forward for the continuous support going forward.
Mr. Charles Dambui
Chief Executive Officer