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Papua New Guinea

Placing SMEs on export pathway

Coffee from the Highlands
Up in the highlands of Papua New Guinea, the arrival of the coffee harvesting season brings hope and promise for the people.
With only two harvesting seasons per year, the lives of these communities revolve heavily around the harvests which rake in much-needed cash and enables farmers to fulfill their commitments and obligations to family and their community.
As harvesting approaches, Kosem Ltd, a coffee-producing company, prepares to make the rounds for the collection of ripened coffee cherries. Kosem Ltd is located in Banz, Jiwaka Province in the highlands of PNG where most of the country’s coffee is grown. The company has been buying coffee from smallholders and has been processing and exporting coffee since 2005.
Coffee beans produced by smallholders are usually graded based on size rather than flavour profiles therefore attract lower prices. This has been the case for 60 percent of PNG’s coffee. However, Mark Munnull, Kosem Ltd’s Factory and Operations Manager, is looking to change this trend with improved wet and dry processing, flavour profiling and grading of coffee.
To improve returns for smallholder coffee farmers and change the current trends, Kosem Ltd partnered with the Pacific Horticultural and Agricultural Market Access (PHAMA) Program, an Australian Government-funded aid-for-trade program.
Mark went from buying smallholder-produced coffee, processing and exporting to a trained professional roaster and a Specialty Coffee Association or SCA-certified Q-grader. He was one of four trainees from PNG who successfully completed a demanding Q-grader training organised by PHAMA. The training, he said, was a capacity-building initiative that is now a necessity for his business. In the world of coffee, being accredited by international body like the SCA carries significant recognition.
Through support from PHAMA, Kosem Ltd received co-funding for a coffee-roasting machine that has added value to their coffee beans and become a valuable part of operations.
Mark represents Kosem Ltd as a member of the Coffee Industry Working Group (IWG), a group PHAMA helped establish with industry stakeholders to identify industry priorities. PHAMA has helped PNG’s coffee industry by:
n Developing opportunities in specialty coffee markets, that also includes roasted coffee beans;
nImproving the industry’s capacity to monitor export quality;
nSupporting the Coffee Industry Corporation (PNG’s regulatory authority for coffee exports) to deliver internationally certified courses for traders, buyers and farmers;
nSupporting PNG’s national coffee cupping competitions since 2015 which has garnered a growing interest from local coffee-growing groups; and
nCompleting a market coffee study that will form the basis for focused and strategic growth of the coffee industry particularly in the Specialty Coffee market.
Kosem Ltd is one of 12 coffee companies currently being supported by PHAMA to complete training in coffee roasting. The company is one of four medium-sized businesses now selling high-quality, Q-graded beans to roasters within PNG and is working towards exporting to international specialty coffee buyers.
PHAMA’s support in the coffee industry has been pivotal in establishing market access for PNG coffee. The program has also extended similar support in other industries including high-value coconut products, fresh produce, cocoa and handicrafts.

Fine arts rich in culture
Susan Bakani owns Artisan Culture PNG, an online-based business that resells fine PNG arts and handicrafts. Through her business, Susan bridges the gap between artisans, designers and consumers through education and design. She buys most of her artifacts from artisans in Milne Bay and resells them to local and international buyers.
Susan works with women in remote parts of PNG to catalogue their artifacts and share the stories entwined with every piece she markets. PHAMA partnered with Susan to help boost the sales of PNG handicrafts to tourists and ensure continued support for the livelihoods of families who depend on handicrafts.
While PNG boasts a wide and diverse range of quality handicrafts, tourists have often been reluctant to buy local handicrafts due to biosecurity concerns. Drawing from its work in Vanuatu in 2015, PHAMA developed and launched the PNG Handicrafts Biosecurity Awareness Vendor Guide outlines Australian and New Zealand biosecurity requirements for the export of PNG handicrafts items. The program also produced the PNG Handicrafts Biosecurity Awareness Video that screens on cruise ships and at tourist spots to inform tourists about biosecurity requirements and the value of handicrafts to local livelihoods. Posters have also been distributed in main tourism hubs including Milne Bay, East New Britain and Port Moresby for public awareness.
PHAMA has been working with Susan and in collaboration with the National Agriculture Quarantine and Inspection Authority (NAQIA) and the Tourism Promotion Authority (TPA) to deliver training on how to use the guide.
Through an arrangement between PHAMA and Pacific Business Link, Artisan Culture is one of several SMEs in the IWG that received help with bookkeeping and having an accountant that helps with budgets and tax returns for their businesses. Earlier this year, Susan travelled to Auckland, New Zealand as part of a trade visit organised by Pacific Trade & Invest. The visit provided a platform of exposure for her products and helped develop her export network.
Coconut cosmetics
On Vunakanau Estate in Rabaul, East New Britain, Theresa Arek and her family run Amruqa, a high-value coconut products business that specialises in making virgin coconut oil, coconut-based cosmetics and essential oils for the domestic and international markets.
Through PHAMA support, Amruqa had the opportunity to feature at Hong Kong Cosmoprof, an international cosmetics fair. Theresa said not only has PHAMA helped resurrect the coconut industry, it continues to find accessible markets for high-value coconut products like theirs.
PNG currently exports approximately PGK 84million in coconut products annually including a small, but growing proportion of high-value products like soap, coconut oil and cosmetics.
PHAMA completed a market study in 2017 to explore opportunities to increase exports of HVCPs to international markets especially Australia, New Zealand, China, USA and Japan.
It also supported industry work in quality standards to meet international market requirements and assisted producers to market their products appropriately in target markets.

Linking industries for improved collaboration
Like other small island economies in the Pacific, market access is also an issue in PNG. To help address these issues, PHAMA has been working with the PNG Government and the private sector to help manage market access by providing technical assistance to meet market requirements. PHAMA strategy is to improve market access for the country’s key horticultural and agricultural export industries and promote industry coordination through the formation of industry working groups or IWGs.

PHAMA has helped facilitate dialogue and communication among industry stakeholders in the cocoa, coffee, high-value coconut products, fresh produce and handicraft IWGs. This has helped to improve networking and collaboration among PNG’s industry and government players; and also helped improve market confidence for PNG producers tapping into the export market for the first time. For Mark, Susan and Theresa, these efforts have helped place them on the pathway to export markets and business success.