In 2024, Papua New Guinea’s cocoa exports reached PGK1,233 million, surpassing coffee for the first time. However, forecasts suggest coffee will regain its dominance by 2025, projected to yield PGK1,580 million against cocoa’s PGK1,363 million. Global cocoa production faced a decline, while coffee experienced price surges due to adverse weather in Brazil. Overall, PNG’s coffee exports are anticipated to improve significantly in the coming years despite initial challenges.
Papua New Guinea achieved a historic milestone in cocoa exports, generating PGK1,233 million in revenue, which outpaced coffee’s PGK989 million for the first time ever in 2024. However, this situation is anticipated to be temporary, as coffee is set to perform better in the coming years, influenced by predictable low harvest cycles and rising demand.
Despite high prices, PNG faces challenges in rapidly increasing cocoa supply due to historically modest crop yields. Forecasts indicate that coffee will surpass cocoa revenue in 2025, with projected figures of PGK1,580 million for coffee compared to PGK1,363 million for cocoa, yielding combined export revenues of PGK3,000 million, exceeding last year’s PGK2,222 million mark.
Globally, cocoa production fell sharply by 13.1% in 2024, primarily due to adverse weather and diseases impacting key regions like Ghana and Cote d’Ivoire. This scarcity drove cocoa prices up significantly, reaching an average of USD8,214 per tonne, a 148.2% increase from the previous year. Anticipated weak outputs from these nations have further supported price surges, despite recent rains offering hope for improved yields.
Conversely, coffee experienced a dip in production during late 2024, linked to La Niña’s adverse effects on Brazil’s coffee crops, which constitute 40% of the global supply. This disruption has led to unprecedented escalations in coffee prices, hitting USD4.39 per pound, with expectations of strong demand continuing into 2024, setting an average price of USD2.95 per pound.
For coffee exports, PNG exported approximately 827,100 bags in 2024, reflecting a 14.1% decline from the previous year. Nonetheless, given the cyclical nature of coffee production, the upcoming year is likely to herald higher yield volumes. There is optimism about achieving one million bags in 2025, despite potential challenges in managing working capital in the supply chain due to rising prices.
The cocoa market has shown resilience, with record prices encouraging exports to rise. PNG managed to export about 39,000 tonnes of cocoa in 2023, marking a modest year-over-year increase. However, attrition of farmers to alternative crops like balsa wood has tempered production growth, hindering the ability to capitalize on the price boom.
Looking ahead, coffee is poised to reclaim its top position in PNG’s export economy, driven by increased volumes and prices. While PNG remains a price taker in international markets, adjustments to align with global price trends are essential to maintain competitiveness.
In summary, Papua New Guinea’s cocoa exports experienced unprecedented highs in 2024, surpassing coffee for the first time, although projections indicate a probable reversion to coffee dominance in 2025. The challenges of crop yield limitations and switching to alternative crops threaten cocoa’s future growth potential. Conversely, coffee prices are set to remain elevated due to strong global demand and reduced Brazilian yields, suggesting that PNG will achieve significant revenue growth in this sector moving forward.
Original Source: www.fijitimes.com.fj
