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Trade4go
Aug 30th, 2021
Original content
What are current challenges in Papua New Guinea's vanilla market?
The current challenges in Papua New Guinea's vanilla market include:
Fluctuating demand: Global demand for vanilla can fluctuate significantly from year to year, depending on economic conditions and other factors. This can make it difficult for PNG vanilla farmers to plan their production and secure a fair price for their product.
Lack of infrastructure: PNG has limited infrastructure, which can make it difficult and expensive to transport vanilla beans from farms to processing facilities and export ports.
Limited access to finance: Many PNG vanilla farmers are smallholders with limited access to finance. This can make it difficult for them to invest in improved farming practices and post-harvest processing facilities.
Informal trade: A significant portion of PNG's vanilla is traded informally, outside of government channels. This can lead to price suppression and make it difficult to track the quality and quantity of vanilla being exported.
Climate change: Climate change is a growing threat to vanilla production in PNG. Cyclones, droughts, and other extreme weather events can damage vanilla crops and reduce yields.
How is the supply chain formed?
-Farmers -> Cooperative society -> Traders/Exporters
-There are 3 main farming regions, of which most of the products are for export purposes
-Farmers don’t have the documentation so they need a trader or an exporter
-A cooperative society gets a quoted price from the farmer where the farmer had already added the profit. The cooperative society adds profit and brings the products to the port then exports.
-The cooperative society invites other farmers to join so they increase in number along the way.
-The growers are mid-sized and it’s not a big industry.
-Exporters are leading companies in that industry and they export other products than vanilla.
-Farmers cure and dry the vanilla beans after harvesting. They have their own facility. They do it under the shade
How is vanilla processed?
The processing for vanilla; Harvest -> Drying under the sun for 2-4 weeks -> Curing -> Drying -> Selling
How close-knit are supplier networks of Papua New Guinea vanilla?
The cooperative society for vanilla is formed by farmers and traders who are all part of the supply network for vanilla.
What are the most attractive markets for Papua New Guinea vanilla?
Europe (Germany, Belgium, UK, France) are the most appealing markets for vanilla from Papua New Guinea due to the high demand and large market size; consumes a lot of sweet food which contain vanilla.
Which countries are the most attractive markets for Papua New Guinea vanilla?
Europe (Germany, Belgium, UK, France) because demand is high and the market size is big; consumes a lot of sweet food which contain vanilla.
What is the export process for Papua New Guinea Vanilla?
-The importer makes dried powder which is used in various processed products
-The deals are made in CIF prices as the product is not heavy so these can be transported via air freight and sea freight
-Is Ordered from the cooperative society. If the cooperative society has stock, they get from there. If they don't, they source from other farmers
-Order in kg, not MT because it’s a high-value product
What are the required certificates to export Papua New Guinea vanilla?
- Testing certificate – suppliers get product testing and approval by government entity
- Normally, importers want an A grade and want testing done (government agency stamp and third party inspection)
- Certificate of origin
- Phytosanitary document
What are potential quality-related issues with Papua New Guinea vanilla?
- Sold by different grades
- The longer the size of the bean, the more expensive
- In 1kg, you can put 10-20 beans that are just harvested but when dried, you can put 30-35 beans/kg because of the dryness –> Thus is more expensive
- The supplier provides a testing report to the trader depending on the demanded grade from the buyer
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