Cocoa is the third most important crop in terms of its economic importance to PNG as it provides direct economic benefit to over 150,000 households who depend on cocoa as a main cash crop. It significantly impacts rural livelihoods and involves both men and women equally on the production side, but men tend to benefit more from the sales of cocoa.

A World Bank (2018) study shows that women involved in planning and managing accounts enhances the bargaining power of women and has positive impacts on cocoa production yield. PNG’s Cocoa generated an export revenue of USD 61 million from 42,300metrictonnes in 2017.

Exports are growing steadily as management of cocoa pod borer improves. There are new investments in production and processing in the domestic market (Queen Emma Chocolate) and clear opportunities for increased business efficiencies in quality control and assurance. There are significant private sector investments and public-private partnership (PPP) arrangements supported by the Productive Partnerships in Agriculture Project (PPAP). Cocoa clone distribution, agronomic methods, processing facilities and improved cocoa pod borer controls are proven methods of achieving substantial yield improvements.

PHAMA Plus liaises closely with PPAP to ensure coordinated support to the Cocoa sector. The current PPAP projects will scale down in early 2020and will transition in to the new PNG Agricultural Commercialisation and Diversification (PACD) project.

PHAMA’s previous work in the PNG Cocoa sector has demonstrated that it is feasible to promote high quality exports to boutique and specialty markets.

From 2016-2018, PHAMA’s work on PNG Cocoa focused on improving export markets through support for quality improvements and linkages to specialty (premium) markets. PHAMA undertook a range of activities to increasecocoa export volumes and prices.

Firstly, PHAMA supported the creation of the Cocoa Industry Working Group (IWG) to identify industry priorities and coordinate development. PHAMA then supported a range of IWG priorities including: (i) a cocoa market study which identified demand and supply side barriers to enter the specialty cocoa market; (ii) a sensory panel to assist with the flavour profiling of various cocoa varieties; (iii)cocoa dryer trials in partnership with the Cocoa and Coconut Institute; (iv) supporting a trade visit by four specialty chocolatiers from the UK, Belgium, France and USA; and (v) organising the inaugural cocoa show in May 2017.

PHAMA’s support resulted in two cocoa producers exporting cocoa to international specialty markets in Hawaii, UK (Harrods), Australia and New Zealand. This enabled several cocoa producer groups to establish export pathways for specialty cocoa, with exporters providing transparent pricing and freight arrangements. This delivered significant results, with an additional PGK 150,000 being generated by four cocoa producer groups by access to higher priced markets. PHAMA Plus will continue to build on these efforts using a market systems development MSD) approach.

The global cocoa market is distinguished between two market sub-sectors: conventional cocoa(95% of total) and premiumcocoa (5%). Global trade of cocoa hasan annual turnover of approximately USD10.5 billion or 4.5 million tonnes of bulk dry bean (2018) of which PNG’s production is only 1%. The International Cocoa Organisation (ICCO) reported that there is a rapid growth rate of 7-10% in the demand for fine flavour cocoa, compared to conventionalcocoa’s 3-6%.

The main consumers for fine or flavour cocoa are traditional cocoa consuming countries like Belgium, France, Germany, Italy, Switzerland and United Kingdom; while Japan is a new and fast-growing market. The ICCO Ad hoc Panel on Fine Flavour cocoa further provides a reference to global key players in the cocoa economy on the percentage of this typeof cocoa exported by each producing country.

The majority of cocoa exported from PNG is sold to Asian grinders. Over the last decade, Malaysia and Singapore continue to be PNG’s largest importers. PNG’s current exports of dried cocoa beans are to the following destinations showing a decrease in Singapore’s imports: Malaysia (40%), Singapore (20%), USA (11%), Indonesia (11%), Belgium (8%), Germany (2%), Thailand (5%), and other smaller markets. Out of this, 90% is exported by 3major exporters. 

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