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28 Apr 2024 2:49
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  •   Home > News > International

    A global cocoa shortage could soon impact the price of chocolate, and PNG growers are cashing in

    Over the last few years, a peculiar change has taken place in Papua New Guinea's north-west, with remote, traditional villages modernising at a rapid pace. Here's how the price of cocoa is fuelling development.


    Over the last few years, a peculiar change has taken place in Papua New Guinea's north-west.

    Remote, traditional villages separated by dense jungle and the mighty Sepik River have long been cut off from the rest of the world, unable to access electricity or medical offices.

    But now these communities are modernising at a rapid pace.

    Newly installed solar panels are providing access to power far from the grid, while construction gets underway on vital health facilities.

    And it's all thanks to the soaring price of cocoa.

    Cocoa is a vital component in chocolate, but it's currently in short supply globally.

    While that's bad news for customers ahead of Easter, it has been good news for growers in PNG.

    Wading through knee-deep water, Sperian Kapia admires the fruits of his labour: a plot of cacao trees adorned with brightly coloured cocoa pods.

    "We have money now, we can plant our own cacao," Mr Kapia said.

    "And now we have this increase in price, we can do what we need to do to improve our livelihood."

    The lingering concern for growers now is how they can turn shortage-fuelled interest into a sustainable industry.

    How PNG is cashing in on a global cocoa shortage

    Most of the world's chocolate production relies on the export of beans from West Africa, with Côte d'Ivoire and Ghana responsible for about two-thirds of global output.

    Bad weather, disease and long-term deforestation have resulted in a shortage of cocoa yields in the region.

    With fewer cocoa beans available than in previous years, the price of cocoa beans has skyrocketed.

    The shortage is having an impact on chocolate, with prices increasing in the lead-up to Easter.

    There is an expectation this will continue in the short-term, with future price hikes being signalled by major producers.

    PNG farmers have been reaping extraordinary rewards from the global shortfall.

    Mr Kapia said the extra profits are allowing people to save money and invest in themselves and their children's futures.

    "[People are] putting money down for school fees, health and education," he said.

    "We're hoping that by the end of this year/going [into] next year, most of our farmers will be establishing their permanent homes, water tanks and other areas of improving their livelihood."

    The price increase has also encouraged more locals to get into the cocoa trade.

    "People have gone crazy with their plots … everybody's in the field now because of the price," said International Trade and Investment Minister Richard Maru.

    But there is no certainty about how long it will last.

    "I think it's a great blessing, but the challenge for us as a government is how do we maintain the same price when the issues in West Africa are gone?"

    'PNG cocoa arrives at the factory very fresh'

    Cocoa beans are harvested from the pods that grow on the cacao tree.

    When the husks are first cracked open, they reveal a slimy, white pulp that is held together by a placenta.

    The beans are extracted from the slippery material inside before undergoing a complex fermentation process.

    Different countries process their beans in different ways, but in PNG the cocoa yield is taken to "fermentaries" where they are left to ferment and develop their flavour.

    The beans are then dried, often undercover and above heated kiln pipes, because of the frequency of wet weather in PNG.

    Occasionally, broken pipes can leak smoke into the beans, creating "smoke taint" and impacting flavour.

    Exporters hope issues like this can be improved by reinvesting some of the profits from cocoa yields into better equipment at fermentaries.

    After the drying process, they are ready to be sold to exporters and often shipped to South-East Asia.

    At large processing plants, beans are used to make semi-finished cocoa products — such as cocoa powder and cocoa butter, which are turned into chocolate.

    Ron Neville, from cocoa exporter Elliven Limited, said PNG cocoa is highly sought after by both factories and "bean to bar" manufacturers, because of its flavour characteristics.

    "The PNG supply chain is very compressed, meaning that it doesn't take very long for the cocoa to be harvested off the tree, fermented, dried, brought to the exporter and then shipped," he said.

    "It means that PNG cocoa arrives at the factory very fresh."

    PNG sits just outside of the 10 largest exporting countries for cocoa, and while its production pales in comparison to those countries, it has lofty goals to increase its output.

    Growers and exporters in the cocoa industry have two clear objectives — to increase the quantity of cocoa being grown and to improve the quality of the product to keep yielding a high price.

    "Our country right now has been producing around 40,000 metric tonnes to 50,000 metric tonnes for a long time," Mr Maru said.

    "We can grow that, we can double down and triple that if we had more seedlings.

    "So my encouragement to donors and partners — apart from training and quality — [is that] we must focus on more seedlings."

    While PNG's economy is largely resource and mining driven, there are many who hope its agricultural output can help support families.

    East Sepik Governor Allan Bird, who is known in PNG as the "Vanilla King" after building successful vanilla businesses, thinks agriculture is a great equaliser "because people own 97 per cent of the land in PNG".

    "Getting them to use their land to kind of create an opportunity for them is a smart way of, I guess, bringing that land into production," he said.

    A study by PNG's National Research Institute found farmers earn a favourable proportion of the export price of cocoa beans.

    "PNG is producing less than 1 per cent of the world's production at the moment," Mr Neville said.

    "If we can really use this excitement to encourage people to plant cocoa and to manage their farms better, [we can] therefore increase the level of production in Papua New Guinea."

    A small pest is threatening the industry

    The road to a viable cocoa industry has been a challenging one for PNG over the last decade.

    Along with the current concerns over how long the price of cocoa will stay high, a tiny pest has been posing a thorny problem to ongoing supply.

    The cocoa pod borer, referred to as the Conopomorpha cramerella, is a mosquito-sized moth that lays eggs on the surface of cocoa pods.

    When the larvae hatch, they tunnel through the plant, damaging leaves and stems, as well as feeding on the material around the seed.

    It results in undersized seeds and poor-quality cocoa beans that are unfit for sale in the broader cocoa market.

    Growers, government and international partners including the United Nations, have responded by developing cocoa plant "clones", which are grown from seedlings at nurseries.

    The clones are a replica of existing cocoa plants but they have better yields and are more pest and disease resistant.

    In East Sepik, hundreds of clone cocoa nurseries have been set up in the last few years in rural districts to keep the industry ticking over as the country battles the cocoa pod borer.

    The clones appear to be doing the job.

    Yangoru district nursery owner Cephas Wohuiene said he has been run off his feet as a result of "people who did not plant cocoa now wanting to plant cocoa".

    "There is a big demand at the nursery, so I am trying to meet the demand," he said.

    Mr Bird said almost every village now has its own nursery.

    "Whereas previously we had only a few in the whole province," he said.

    "We kind of liberalised the whole industry."

    In the same district, grower Benedict Niafihu is enjoying the spoils of his cocoa crop, having grown clones from seedlings.

    He has also adopted other methods to deter the pod borer from laying eggs, such as releasing fire ants on his crops.

    The reward for all his efforts has been a healthy cocoa yield.

    "The cocoa pods are now back to what it was before," he said.

    "We are happy there is no disease now and we are making good money."

    The influx of cash into these remote communities has not only paved the way for more development, but transformed the lives of locals.

    It is also offering more pathways for younger generations.

    "The money from cocoa has sustained our living for families," Mr Niafihu said.

    "People are starting to build new houses. At the same time, the money from cocoa has paid for school fees."


    ABC




    © 2024 ABC Australian Broadcasting Corporation. All rights reserved

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