Papua New Guinea experienced record cocoa export revenues in 2024, exceeding coffee for the first time. However, coffee is projected to regain its top position in 2025 due to higher anticipated yields and prices. Global cocoa production has faced declines, but prices have surged. Both sectors will see strategic challenges in maintaining competitiveness in international markets.
Papua New Guinea (PNG) achieved a record in cocoa exports for 2024, generating PGK1,233 million in revenue, thereby surpassing coffee receipts for the first time in history at PGK989 million. However, this new ranking may prove temporary. Despite sustained high prices, PNG’s ability to rapidly increase cocoa supply remains limited due to historically small crop sizes. In contrast, coffee is forecasted for a bumper year in 2025, following a lower-volume season last year, with fluctuating yields attributed to alternating production cycles.
Global cocoa production faced a significant decline of 13.1 percent in 2024 due to drought and disease impacting yields in major producing regions such as Ghana and Cote d’Ivoire. Nevertheless, persistent end-use demand drove cocoa prices to an average of USD8,214 per tonne, marking a 148.2 percent increase compared to 2023. Despite a temporary price reduction in February 2025 to USD9,917 per tonne, expectations are set for cocoa prices to average around USD8,000 per tonne in the year ahead.
Conversely, coffee production experienced a dip in 2024 following Brazil’s downgrades to Arabica bean production due to adverse weather conditions. With Brazil accounting for 40% of global coffee production, this setback is expected to impact yield volumes significantly. Coffee prices peaked at USD4.39 per pound on February 13, 2025, contributing to a forecast of USD2.95 per pound as the highest annual average ever. Furthermore, PNG’s coffee exports for the 2024 calendar year fell to 827,100 bags, a 14.1 percent decrease from 2023, though a recovery to one million bags is anticipated by 2025.
The rise in cocoa prices last year facilitated an increase in cocoa exports, with PNG exporting approximately 39,000 tonnes in 2023, representing a 1.3 percent year-on-year increase. Despite high prices prompting increased smallholder investment in crop management, a shift in farmer focus towards balsa wood plantations has limited growth in cocoa production. Thus, cocoa exports for 2025 are projected at 42,000 tonnes.
Historically, PNG’s coffee exports have outperformed cocoa regarding revenue generation. Nevertheless, cocoa led last year with PGK1,200 million compared to PGK989 million for coffee. In 2025, coffee is predicted to reclaim its leading position with forecasted export revenues of PGK1,580 million compared to PGK1,363 million for cocoa due to rising export volumes and prices. Ultimately, PNG’s market competitiveness depends on its ability to align local prices with global market rates, as discrepancies could hinder international sales.
In summary, Papua New Guinea is witnessing a significant year for cocoa exports, achieving record revenues for 2024. However, the coffee sector is expected to rebound strongly in 2025, reclaiming its leading position in export revenues. Despite cocoa’s present high prices, limitations on production capacity persist, while coffee’s recovery is bolstered by strong demand and market conditions. Adhering to global price standards will be crucial for maintaining PNG’s competitive edge in international markets.
Original Source: www.fijitimes.com.fj
