Rates to affect growers

 SMALLHOLDER Oil Palm Growers stand to lose K50 per tonne as a direct result of the Central Bank’s intervention into the foreign exchange market starting next month.

This was revealed yesterday by Bialla Oil Palm Growers Association.

The Bank of Papua New Guinea’s intervention on the value kina, which saw the value appreciate from 0.34 to 0.41, means that exporters would receive less for their exports.

It is understood that smallholder oil palm growers in Bialla, West New Britain, are receiving K280 per tonne of fresh fruit bunch this month.

This price is based on an exchange rate of 0.3483 which was the average exchange rate in May.  

Next month the average exchange rate will be 0.41as set by BPNG.  

The price for smallholder fresh fruit bunch will be approximately K230 per tonne, a drop of K50 per tonne.

Chairman of the Bialla Oil Palm Growers Association and Chairman of PNG Oil Palm Growers Association Oka Ailan Kamale said with the exchange rate of 0.41, the growers would lose significantly in terms of revenue.

“This will greatly affect more than 3600 oil palm growers in Bialla. These are families with more than 10 mouths to feed,” he said.

Kamale said it would affect mothers through the Mama Lus Fruit Scheme.

“Everyone benefits through the Mama Lus Fruit Scheme as mothers when managing any cash on hand, spends on the whole family,” he said.

He said the drop of K50 per tonne was disappointing to the growers as the amount of hard work put into oil palm production was huge.

This drop in income will also impact the oil palm processing companies as their exports are now worth less in kina.  

This means that business houses in WNB will struggle as the main source of cash spent in stores come from oil palm.

The bank’s decision to limit the spread on foreign exchange buy and sell rates was supported as for too long banks have been making significant profits on the foreign exchange trading.

“Maintaining kina at between 0.35 and 0.38 protects agricultural exporters from the impacts of Dutch Disease. I hope the government looks into this in our favour,” he said.