Papua New Guinea is repositioning its coconut industry toward high-value manufacturing and downstream processing in a move aimed at creating jobs, increasing rural incomes and attracting investment during the country’s 50th Independence year.
Speaking this week at the National Agriculture Research System (NARS) Policy Forum in Lae, Kokonas Indastri Koporesen (KIK) Managing Director Allan Aku said the country could no longer rely on exporting raw copra while most of the economic returns were captured overseas.
He said the shift in strategy is designed to ensure more value remains in Papua New Guinea and delivers greater benefits to farmers, communities and the national economy.
“For many years our people have worked hard producing copra while most of the value has been realized further down the supply chain by others,” Mr. Aku said.
“It is time for Papua New Guinea to own more of that value and ensure the benefits flow back to our farmers, communities and the national economy.”
The coconut industry remains one of Papua New Guinea’s largest agricultural sectors and supports the livelihoods of more than three million people through employment, food security and household income.
Papua New Guinea has approximately 94,000 hectares under coconut cultivation, supporting between 464,000 and 533,000 households, with an estimated 134,000 households depending on coconuts as their main source of cash income.
The industry currently includes 20 registered exporters and 27 micro, small and medium enterprises producing virgin coconut oil and other value-added coconut products.
While exports have traditionally centered on copra, crude coconut oil and copra meal, domestic processing capacity has expanded steadily.
Between 2022 and 2025, local producers manufactured 6,373 metric tonnes of white copra, 449 metric tonnes of virgin coconut oil, 62 metric tonnes of coconut soap and nearly 188 metric tonnes of body oils.
Mr. Aku said KIK intentionally redirected industry growth toward downstream production after recognizing farmers were receiving only a small portion of the sector’s overall returns.
“When we saw the profits being generated through processing, we asked ourselves why our people should continue producing raw copra while others captured the returns.
“That was when we made the strategic decision to focus on high-value coconut products,” he said.
Today, KIK supports 27 MSMEs and cooperatives producing virgin coconut oil, soaps, body lotions and other coconut-based products, creating new business opportunities across rural Papua New Guinea.
Several local enterprises have already secured supply agreements.
One MSME is preparing to supply 1,000 liters of virgin coconut oil each month to RD Tuna, while other supplies products to Chemcare Group Ltd.
Three MSMEs are also supplying virgin coconut oil products to City Pharmacy Limited, while two companies have entered export markets in Australia, New Zealand, Great Britain and Japan.
Mr. Aku said the results show what rural businesses can achieve when supported with training, market access and technical assistance.
“We only need to empower our people with the right support and opportunities, and they will build successful businesses.
“Papua New Guineans are resilient, innovative and capable of competing in international markets,” he said.
A major milestone for the industry has been completion of Papua New Guinea’s first National Coconut Census.
The census identified approximately 16.88 million coconut palms across nearly 94,000 hectares and mapped every coconut-growing district and local-level government area.
The data also estimates annual production capacity and identifies opportunities for value-added products including virgin coconut oil, coconut milk, coconut water, activated carbon, coconut fiber and coco peat.
“This information gives investors’ confidence,” Mr. Aku said.
“For the first time, we know where the raw materials are located and can direct investment to suitable processing locations.”
KIK has already attracted investment interest from companies in Sri Lanka, New Zealand, Australia and China for large-scale coconut processing facilities.
Mr. Aku said one of the industry’s biggest untapped opportunities lies in converting coconut waste into industrial products.
He said coconut shells can be processed into activated carbon used in water treatment, electronics manufacturing and mining.
“Our mining industry imports activated carbon while we continue discarding one of the raw materials needed to make it here,” he said.
He added that coconut husks also represent an untapped commercial opportunity.
KIK is also progressing research into coconut sap sugar, a premium natural sweetener attracting increasing global demand.
Research remains central to the organization’s long-term plans through the Stewart Research Station in Madang and the International Coconut Genebank in Milne Bay, focusing on improved varieties, production systems and disease management.
Since 2021, KIK has supported the planting of more than 1.12 million coconut seedlings across 11,262 hectares through rehabilitation and expansion programs.
However, Mr. Aku acknowledged that reduced government funding in 2024 and 2025 had slowed rehabilitation targets and highlighted challenges including ageing plantations, poor transport infrastructure, unreliable electricity, limited financing and biosecurity threats.
“If Papua New Guinea is serious about developing a globally competitive coconut industry, we must invest in roads, electricity and reliable water supply in coconut-growing regions,” he said.
KIK is now developing a new National Coconut Industry Policy and reviewing legislation to encourage investment, innovation and sustainable growth.
Mr. Aku said the broader goal is to keep more value within Papua New Guinea through manufacturing, job creation and stronger rural economies.
“Fifty years after Independence, our people deserve to own more of the value chain.
“Our future lies not in exporting raw commodities but in creating finished products and jobs here at home,” he said.