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Cocoa drives PNG cash-crop boom

Pacific Economist, Commodity Strategist & Senior International Economist, ANZ

2024-05-01 00:00

Papua New Guinea (PNG) is poised to record its best ever annual cash-crop export revenue in 2024, largely on the back of surging global cocoa prices.

PNG’s three key cash crops consist of cocoa, coffee and palm oil. The expected 2024 return is quite extraordinary given the economy experienced an unprecedented boom in cash-crop export receipts in 2021 and 2022, due to a spike in both coffee and palm oil prices.

Current prices for both coffee and palm oil, while still decent, have retreated from recent peaks, in line with increasing global supply. However, any decline in revenue (from a lower price in US dollar terms) will be more than offset by expected bumper returns from cocoa exports from PNG.

ANZ Research expects PNG’s cash-crop exports to reach 4.3 billion kina in 2024, a jump of 31.4 per cent on the previous corresponding period. Such a figure would be 1.8 per cent higher than the previous record of 3.8 billion kina achieved in 2022.

In 2025, ANZ Research expects export revenue to fall to 3.3 billion kina as crop shortages ease and prices begin to reflect a more balanced market.


These three commodities are the mainstay of PNG's agriculture sector which accounts for 16.6 per cent of PNG’s total gross domestic product (GDP). Agriculture makes up 12 per cent of the geography’s total export earnings and supports around 80 per cent of the population.

Global cocoa production for the 2023-24 season (in the year to September 30) is expected to decline by 547,000 tonnes, or 11 per cent, year on year. Extended drought, crop disease and delay in fertiliser applications materially reduced yields out of Ivory Coast and Ghana, which together contribute 60 per cent of global beans.

End-use demand for cocoa is holding above production, so when the International Cocoa Organisation (ICCO) announced the lower yield in February, prices rose from $US4,200 a tonne in December 2023 to $US10,000 a tonne ton on April 1.

However, this Everest-like spike in prices won’t last long. The second crop for calendar year 2024, to be harvested from October 1, is forecast to be better. Improving weather due to the emergence of a La Niña weather pattern is expected to bring more timely rain.

In ANZ Research’s view, this should tilt the market back to a steady state, pushing the price down towards $US5,000 a tonne by the end of the year.


PNG’s farmers are not experiencing the same supply disruptions as their counterparts in West Africa, and are maintaining last year’s 42,000t of supply, with some upside. PNG’s cocoa export receipts are forecast to come in 1.04 billion kina in 2024, up 105.2 per cent year on year – on track for its highest-ever result.

Coffee prices are still doing better than their long-term average. PNG exported 963,075 bags of green beans in 2023, and ANZ Research expect the 2024 figure to hit 920,000 bags. While this is 4.5 per cent lower than 2023, it is still 16.9 per cent higher than the average between 2018 and 2022 - and the decent prices are encouraging solid export volumes.

The eruption of the Ulawun volcano on PNG’s New Britain island, which began in November 2023, has impacted oil palm plantations on the mountain’s slopes, and this will likely see palm-oil production volumes dip slightly in 2024 to 665,000t, compared to 674,000t in 2023.

Dry weather and a delay in fertiliser applications across 2021 and 2022 due to supply disruptions will weigh on volumes. These kinds of disruptions can impact yields for up to 18 months. Having resumed last year, a renewed supply of fertiliser should lift export volumes to around 685,000t in 2025.

Kishti Sen is a Pacific Economist, Soni Kumari is a Commodity Strategist & Tom Kenny is a Senior International Economist at ANZ

This story is an edited excerpt of the ANZ Research report “Papua New Guinea: bean counting”, published April 22, 2024.

Cocoa drives PNG cash-crop boom
Kishti Sen, Soni Kumari & Tom Kenny
Pacific Economist, Commodity Strategist & Senior International Economist, ANZ
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