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Old 27-03-2017, 11:40 AM
Cool_Guy1 Cool_Guy1 is offline
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Coffee Pod Borer Disease

Over the years, the coffee industry via, the Coffee Industry Corporation has tried its best to mitigate or prevent the entry of infectious disease spread by insects that affect the fruition of coffee beans. The latest news we hear is of the presence of coffee pod borer disease in the Eastern Highlands province. This is sad news for the country, where finest natural coffee is produced without use of fertilizers.

A similar fate was experienced in the cocoa industry, a several years back, however, it took very controlled measures and cutting down and replanting of hybrid cocoa trees that had resulted in eradicating the cocoa pod borer disease. Initial, the impact it had on cocoa producers and exports took a tool on their income, however, the industry is slowing picking up to pre-crisis period. In fact, when i spoke to an industry insider, he said, the cocoa pod borer was a blessing in disguise, because, the aggressive effort to eradicate the disease resulted in farmer, taking care of their cocoa trees delicately. This resulted in high cocoa production. The coffee industry could face the similar fate, however, the onus is on the Coffee Industry Corporation to carry out aggressive campaigns to eradicate the disease.

Why am i sharing this? it is because, Research shows that PNG's kina exchange rate is a commodity currency, hence any negative developments affecting PNG's major export commodity, will surely affect the kina exchange rate. How does this work? the Banking system needs foreign exchange inflows so that importers can use that foreign exchange to purchase imported items. Low inflows of foreign exchange due to coffee pod borer, while import demand remained high, would result in either depreciation of the kina or, depletion of foreign reserves.
Give this as an election year, and the cash flow problems of the Government, such supply shocks can cause a financial crisis. The Government of the agencies involved with export commodities in PNG should be proactive and eradicate supply shocks that are manageable if done properly.
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