History

In the early 1890's it was the British administration of Papua who first introduced coffee to PNG. Initial plantings of Arabica were in the Rigo and Sogeri areas.

It was the German administration that introduced coffee to the New Guinea side of the country. In the early 1930's it was grown on mission and agricultural stations. Prior to the Second World War, coffee plants of the Typica and the Bourbon Arabica types were introduced to the Highlands by Lutheran missionaries in both Goroka and Mt. Hagen.

Small-holder coffee farming began in the early 1950's in the Asaro valleys of the Eastern Highlands. Robusta coffee has been planted in the coastal provinces since the turn of the 20th century. Before the Second World War, a number of plantations were established in New Guinea, particularly in the Madang Province.


Coffee Today

The coffee business represents the largest industry within the agricultural sector. In 2002 coffee export earnings represented 4.7% of the total exports. Approximately 270,000 families depend on coffee as a source of income and well over 1 million people derive a direct benefit from the coffee industry.

In PNG, approximately 95% of the coffee produced is Arabica and grown in all of the Highlands' provinces with altitudes between 1,000 and 2,000 metres. The remaining 5% is Robusta coffee and is grown in the Lowlands of Northern Sepik, Morobe, Madang and other coastal provinces. Western Highlands Province produces 44% of the total crop, Eastern Highlands 31%, Simbu 10%, Morobe 7%, East Sepik 3%, Enga 3%, Madang 1% and Southern Highlands 1%.

Approximately 75% of PNG's crop is harvested between April and September, the remaining 25% throughout the rest of the year. PNG's annual production is approximately 1,100,000 (60kg) bags.

PNG Y1 grade has always been the major grade of coffee exported out of PNG. In the 1997/98 season, Y1 typically represented 63,5% of exports, PSC X 12,5%, X grade 11%, A grade 4,5%, Robusta 4,5% and T grade 4%.

Nearly 60% of the production goes to Germany, 20% to Australia, 6% to the UK, 5% to the United States, 2% to New Zealand and 7% to other destinations.

In the past, coffee was exported exclusively in 60kg bags. However, this has begun to shift with more bulk shipments being carried out each year. The main shipping port, Lae, is approximately 300 kilometres from Goroka.


Classifications

Arabica coffee is grown at altitudes of 1300 - 1800 metres. Just the right amount of precipitation and excellent soil conditions are what make PNG's coffee quality so good. With particular care given to the selection and processing, some of PNG's plantation coffees are considered to be among the best in the world.


Papua New Guinea's coffee grades:

AA/A grade coffees represent the gourmet coffees produced in PNG and come from the plantation sector. Bean size is greater than screen 17, uniformity is good, with max. 10 defects per kilogram. The raw bean is bluish-green in appearance.

X grade coffee also comes from the plantation sector, but is smaller in size. Bean size is mixed, but generally over screen 14, with good uniformity and 15-20 defects per kilogram. The raw been colour is greenish.

Y1 grade has a mixed bean size and uniformity, up to 70 defects per kilogram and is greenish-grey in raw bean colour. Nearly all small-holder coffee is classified into this grade.

PSC X grade (Premium Small-Holder) coffee falls between the Y1 and X grade coffees.

Finally, T grade coffee (Triage) has a mixed bean size and uniformity, with a maximum of 3% foreign matter, and is yellowish faded green in raw bean colour. It has no excessive foreign odours or flavours.


Marketing

The regulatory body for PNG coffee is known as the Coffee Industry Corporation (CIC). The CIC has a broad range of powers, including buying and selling, setting prices, registering and controlling exports, setting quality standards and controlling creditworthiness of market participants. To date the CIC has concentrated on its regulatory functions setting strict guidelines and implementing stringent controls, leaving the marketing of coffee in the hands of private companies licensed by the board.


Participants in the domestic marketing system:

The growers or domestic producers represent the first group. About 80% of the country's coffee is grown by small-holders on small plots of land averaging about 0.5 hectares. The typical small-holder sells to the independent parchment buyers or mills. The remaining 20% is grown on plantations which range from twenty to one hundred hectares and more in size.

The second major group is represented by independent parchment buyers. It is comprised of numerous local entrepreneurs who purchase parchment coffee either from the coffee markets of the major town centres or directly from the rural source. They then either sell the parchment coffee to the processing mills or have it processed to green beans which they then sell to the exporters.

The processors are the mills that can also purchase parchment coffee and process it into green beans. Cherry processors are allowed if registered with the CIC.

Then there are the exporters operating in PNG. Exporters can only buy green bean coffee. Most coffee is transferred from the processing mills to the exporters' premises where blending and/or reconditioning is carried out to meet the final buyers' needs.