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By Korugl-Kumugl

MOUNT HAGEN, Papua New Guinea (July 31, 1998 - The National)---Papua New Guinea faces a 25 percent drop in its tea export earnings this year due to falling tea prices and the slide in the kina.

The forecast comes despite production having climbed back to its peak level after last year's El Niño-induced drought, according to major tea producers.

"The two biggest worries for us at this moment are the world market price for tea, which is continuing to drop, and the decline in value of the kina which has shot our production costs sky high," said L. S. Kumar, the general manager of Warren Plantations Pty, Ltd., a leading tea manufacturer.

Industry sources said the price for tea on the world market had declined by 40 percent from last year and this trend was continuing because of over production by African countries like Kenya.

"The world price for tea has collapsed and, as a result, we are getting very little returns for our export. The picture does not look too good," another industry source said, adding the only way to counter this trend was to improve the quality of PNG's tea to supply buyers in the USA, Canada and Europe.

PNG exports about 7,000 tons of tea and, when the price was at its peak, this fetched some K13 million (US$ 5.4 million) annually in export earnings, but the picture this year looks bleak due to the decline in the world market price and the slide in the value of the kina.

Mr. Kumar and others said the industry imports all chemicals, fertilizers and other items it uses in the production and packaging of the tea, which had pushed up the production costs by about 40 percent due to the slide in the kina.

According to the industry sources, the Government last year agreed to waive import duties on certain items, but that had not been carried over this year.

They said the double blow would result in a drop in export earnings by some K3.3 million (US$ 1.37 million) for PNG.

Apart from the effects these problems will have on the economy, tea is a major employer, employing some 3,000 people nationwide, and the industry's financial position would also impact on these communities.

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Dear PI Report, Through my cousin's recommendation, I was able to read this article. In a way, this article moved me emotionally after seeing my father's name as one your sources. He passed away last 2008 and only left memories with his family of his earlier life in Papua New Guinea. Being born and brought up in this country is something I'm eternally proud of. Thank you for keeping this article on your site. This somehow makes me feel connected with him and my mother, even though they've passed on. Warren Plantation will always be a beautiful part of my childhood memories. Sincerely, Sakti Violy Kumar Born in Kudjip Nazarene Hospital May 03, 1994 Daughter of L.S. Kumar

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