Coffee Industry Stakeholders
There are many links in the coffee marketing chain. All play very important roles in the flow of coffee and money.
At the grower level, there are three sorts of producers: p
- Smallholders representing 72% of production,
- “20 ha block” (4%), and
- Plantations (24%).
There are approximately 2.5 million smallholders though this number cannot be totally precise as many more family members could in some way be involved in the production, processing or marketing of coffee. A typical smallholder garden will produce around 700-1000 kilogram of coffee (green bean equivalent) from garden of around a hectare. Most will produce cherry to parchment using simple hand pulpers and sun drying. The parchment is then sold to roadside buyers or directly to the factory.
The “20 ha Block” scheme was started in the late 1970’s using finance from the World Bank and largely administered by the then Agriculture Bank. There are around 632 blocks and they account for around 4% of production.
There are around 15,000 ha of plantation coffee with the typical size of each plantation is around 50 ha. Most companies are formed around several plantations; the average size of plantation group is being around 300 ha. Most plantations have an established stock of trees over the past 20 years that have been cycled of new plantings. Most plantations have wet and dry processing facilities and sell directly to the exporter and thus obtain the delivery-in-stock price. One third of the plantation sector is integrated through to the export stage.
Most of the factories are located close to the highways, away from the villages where coffee is grown. This creates the need for buyers to go to the villages to buy parchment from the growers. The Buyers provide a vital link between growers and the processors and the exporters. Buyers act as the middlemen between the processors/factories and the village farmers who sell their coffee directly to them. These buyers then sell the parchment to the processors/factories.
There are around 58 registered processing factories and around 26 unregistered factories. All factories that buy in cherry or parchment from growers need to be registered; thus unregistered factories are plantation based facilities processing their own coffee. A typical processing factory has a throughput of around 25,000 bags though there are some producing up to 100,000 bags. Many processing plants are operating at less than full capacity. Therefore if PNG coffee production were to grow there would initially be no constraints at this stage. View the list of processors currently operating within PNG.
There are currently 14 registered green bean (GB) exporters (of which 12 are currently active) and five Roast Exporters. See our list of exporters currently operating within PNG. Of the 14, there are essentially four different types of exporting companies:
These companies are middlemen in the true sense as they buy in GB from processors and sell to roasters overseas. Although their task is essentially to find a buyer and a seller most exporters are also involved in some regarding and therefore adding value. The four companies represent around 36% of exports.
Partly Integrated Exporters
These are largest of these companies, such as Sigri and Highlands Arabicas are primarily involved in the export stage but have some processing facilities and also own or have a share in some plantations. The other companies are to a varying degree involved in processing and plantations. The four companies account for 57% of exports in 1989/90.
Plantation based Exporters
These companies are plantation based operations that are integrated right through to the point of exports. While they are small in terms of the total volume of coffee exported (7% of the total export) but they export around one third of the plantation crop.
Roast and Ground Exporters
Roast exports are still a very small part of the total PNG Coffee Trade representing around 10 tonnes out of total exports of around 67,000 tonnes. There are currently five specialists roast exporters.
Importers and/or traders play a vital role in getting coffee from producing countries to consuming countries. They perform the following roles:
- Purchase and store coffee from many different origins in bonded warehouses,
- Provide marketing information to roasters (developments in producing countries) and producers (developments in consuming countries and the markets),
- Provide financing to both producers and roasters,
- Take on most of the price risks involved in the coffee trade,
- Traders contribute to market liquidity by purchasing coffee when roasters are not buying and selling coffee when exporters are not shipping.
These are companies that transform GB coffee into roast and ground and instant or soluble. They provide the consumer an attractive product which always maintains exactly the same standards of quality. They also carry out aggressive marketing and promotion. View the list of roasters currently operating within PNG.
These are people (supermarkets, coffee shops, fast food outlets, restaurants and others) who sell coffee to the final consumer. They secure manufactured coffee, both roast and ground and instant, as well as in prepared drinks, sweets, etc and sell to consumers.
Consumers are the most important people along the marketing chain. They are the ones who decide how much coffee they will buy, at what price and what type or quality. All effort put into coffee production, transportation, financing and insurance is aimed at satisfying the consumer.