Rate to cripple farmers

 THE recent decision by the Bank of Papua New Guinea to raise the value of kina from 0.34 to 0.41 against the US Dollar will cripple local farmers and exporters, an official says.

West New Britain Chamber of Commerce and Industry (WNBCCI) president Ian O’Hanlon said this was not a good move by the Central Bank as many local farmers of cash crop would be ‘hard hit’.

It is understood that Oil Palm Growers would now see a reduction of at least K50 per ton for their fresh fruit as a direct result of the exchange rate movement by BPNG. 

O’Hanlon said the growers’ price was wholly dependent on the world market price of palm oil, and the US dollars-Kina exchange rate. 

O’Hanlon urged business houses in the province to prepare for tough times ahead, as the majority of customers would soon have significantly less in their pockets when the fresh fruit bunch (FFB) price drops next month.

He said: “Why would the Bank of PNG make a decision to cripple all exporters around the country, whom they depend on to maintain economic stability?”

“The actively pushed small medium enterprises built up around this sector, will feel immense disappointment. The recovery of the rural economy takes a major step backwards.

“Here in West New Britain, the palm oil industry is a hugely important economic driver. There are over 150,000 people dependent on this business within the province. 

“WNB rises and falls on the back of this one commodity. 

“When oil palm prices are high everyone enjoys the flow-on effects. When prices are low, everyone in WNB suffers.

The president called on the bank’s governor Loi Bakani to re-evaluate the recent decision and stabilise the kina at a more sustainable and competitive rate of 0.36-0.38, for the benefit of the rural economy of the country.

The WNBCCI has joined the swelling movement of associations, organisations and individuals throughout the country requesting for a re-evaluation of BPNG’s decision to appreciate the value of the kina from 0.34 to 0.41 against the US Dollar.