PNG Cabinet approves copra rescue loan

Port Moresby (The National/PINA Nius Online – Papua New Guinea’s National Executive Council has approved a K5 million commercial borrowing by the Copra Marketing Board to support copra prices.

Prime Minister Sir Mekere Morauta announced this, saying that low world prices were threatening the future of the copra industry as well as the livelihood of small growers. 

Sir Mekere noted that the current price was less than K250 a ton, but the cost of production was more than K300 a ton.

“Cabinet’s approval for the CMB to borrow commercially, as an interim measure, will enable the board to support copra prices at K350 per ton for the next six months,” the Prime Minister said in a statement.

“This is a very important initiative for the hundreds of thousands of people whose lives depend on the success of the copra industry.”

Cabinet has also agreed to freeze an existing K5m loan from the Government until it and the industry agree that copra prices are sufficiently high for repayments to resume.

The CMB issued an internal memorandum two weeks ago announcing that growers in selected ports would receive K100 per ton extra between Oct. 17 to Oct. 31.

The memorandum, dated Oct. 16 and circulated to branch managers in Alotau, Madang, Wewak, Kavieng, Rabaul and Kimbe, said the management had approved an increase for Hot Air at K340 per metric ton; FMS K320 per metric ton; and smoked K300 per metric ton.

Prices quoted normally are for hot air, which is the top quality product. Prices for the week ending Oct. 16 were at an all time low of K247 per ton before the relief was announced. 

Growers were getting K969 a ton in August 1999, K780 per ton in January this year and in July it fell to K443 per ton. It is still considered a good price at that level.

The real painful drop occurred in September when the price fell to K283 per ton and it slumped further to below K250 in October.

Meanwhile, the PANG Growers Association claimed yesterday that the CB was about to be declared insolvent.

PANG national president Valentine Camber also said in a statement that the CB did not have sufficient copra at all ports to supply the 3,000 metric tons which a ship, Southern Clipper, was to pick up last week from Kavieng, Wewak, Madang and other PNG ports on a charter from CMB for shipment to Japan.

Mr. Kambori said the Southern Clipper stayed at the various harbors for a few days while the CMB tried to get enough copra together and when it sailed, it then fell short of the tonnage and became liable for high Harbors Board charges and shippers’ “dead freight” charges.

“The shippers now have the option to charge the CMB K70 per ton for the tonnage that they did not receive from the CMB. This dead freight charge could be as high as K210,000 (on 3,000 metric tons) or less, plus any other charges for the copra not loaded,” he said, adding that the industry believed the CMB received only 423 metric tons in Madang.