In Papua New Guinea (PNG) tea is mostly grown in Western Highlands Province between 1200 m and 1950 m altitude in areas where mean annual rainfall is around 2500 mm. A non-producing tea plantation exists at a former government estate at Garaina in Morobe Province at an altitude of around 600 m. Production of tea in PNG is non-seasonal.
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Adoption and history
Tea was established as an experimental crop on a government-owned plantation at Garaina in Morobe Province in 1950. A small factory was built at Garaina in 1962 and PNG tea was exported for the first time in 1963. The high yields and good quality that were obtained at Garaina encouraged the Department of Agriculture, Stock and Fisheries to promote the cultivation of tea as a viable cash crop for both plantation and smallholder producers.
The Department’s policy was to develop the industry on the nucleus estate model, where a commercially operated estate produces tea and also provides a market, processing and technical services for smallholder producers who cultivate tea on village land adjacent to the nucleus estate. In order to facilitate smallholder development, the government established about 3000 ha of land settlement schemes, mostly in Western Highlands Province. However, tea failed to gain acceptance among smallholders. They preferred other cash crops, especially coffee and fresh vegetables, and disliked the continuous labour inputs required for harvesting (‘plucking’) tea leaves and the generally high level of skills required to cultivate tea.
Consequently, the tea industry in PNG remained dominated by six foreign-owned estates and factories that were established in Western Highlands Province in the late 1960s and early 1970s. In 1977 these factory estates grew 80% of PNG’s tea. The remainder came from five smaller estates (three in Western Highlands Province and two in Simbu Province) and from smallholder producers (mostly in Western Highlands Province). It was estimated that smallholders contributed less than 3% of total tea production in 1975/76.
The Garaina estate in Morobe Province ceased to function as a tea research station in the late 1970s, but people living in the area continued to harvest and sell a limited amount of tea from the site. Smallholder interest in tea cultivation continued to decline to the extent that, by 1992, production of tea from sources other than the factory estates was around 24 tonnes per year, or less than 0.5% of total production. Smallholder tea is no longer produced in PNG.
Distribution of production and planting
In PNG tea is produced and exported only by W.R. Carpenter and Co. The company recently purchased a tea plantation from a second company, and a third company abandoned its operations. This mostly foreign-owned company currently operates five separate estates with a combined area of 2200 ha.
Levels of production
The production of tea, measured in terms of export volumes, increased sharply between 1970 and 1980 and reached almost 8000 tonnes in 1980. By the mid 1970s most of the factory estates were fully planted, and production continued to increase as the tea plantings matured. Production levels remained relatively high until 1985, in association with the high world tea prices in the early to mid 1980s. However, prices fell severely after 1985 and in 1991 reached their lowest point (in real terms) since the early 1950s. This saw a corresponding decrease in PNG tea exports, to 4700 tonnes in 1991 and 3400 tonnes in 1994. Exports increased again after the recovery of world market prices during the mid to late 1990s, coupled with the devaluation of the kina, and reached a historical maximum of 9300 tonnes in 1996. Both prices and export volumes have remained relatively stable since then, with volumes averaging more than 7000 tonnes per year.
Processing, exporters and markets
About 10% of tea produced in PNG is consumed domestically and the remainder is exported. Domestic sales from the Western Highlands estates are around 700 tonnes per year (equivalent to PNG tea consumption of 0.1 kg/person/year). The export market has changed significantly in recent years. In 2006, 30% of tea exports went to Russia, 15% to Germany, 10% to the United Kingdom, 10% to the United States, 9% to India and 4–6% each to Belgium, Canada, Indonesia and Australia. Throughout the 1990s, Australia and the United States were the major importers of PNG tea (in most years receiving more than 50% of exports and around 20% of exports, respectively;). However, when the two major importers of PNG tea in Australia moved their packing plants to India and Indonesia, PNG exports to Australia collapsed. By 2006, the most important export destination for PNG tea was Russia, a market that only appeared in 2002.
The World Bank predicts that real tea prices will decline by about 12% between 2006 and 2015. Global demand for black tea has weakened. This is partly because of a change by consumers from brewed tea to use of tea bags, which require less tea, but also because of a switch by some western consumers from black tea to green tea. Because of the static price of black tea, rising costs of production and the high cost of shipping from PNG compared with that from major overseas ports, PNG’s tea producer is struggling to remain profitable. Prospects for expansion of PNG tea production are limited by constant law and order problems, land compensation demands, and the poor outlook for improved global prices.