GLOBAL commodity prices for cocoa, coffee, and palm oil continue to remain strong and will do so for the remainder of the year, according to Kina Bank’s August Monthly Economic Report that was released on Friday 6 September 2024.
Kina Bank Managing Director and CEO Greg Pawson said while there are still some uncertainties with the Papua LNG project, the non-resource sector particularly agriculture has remained strong since earlier this year.
“Cocoa was the standout performer in August, rising by 17.09 per cent.
“Coffee also ended the month on a strong note, up 9.04 per cent, while Palm Oil saw a modest increase of 0.4 per cent,” Mr Pawson said.
While the International Cocoa Organisation (ICO) forecasted a production deficit of 462,000 tonnes for the current cocoa season.
They reported that global supply chains remain constrained due to adverse weather conditions, aging trees, pests, and diseases affecting major cocoa-growing regions.
On another positive note, the gold price increased by 3.467 per cent in August, driven by uncertainty over US inflation figures.
“It is pleasing to note that the gold price rose by over 60 per cent since the start of 2020. Most of this year’s increase has been driven by the expectation of rate cuts by the US Federal Reserve,” Mr Pawson said.
“Despite the strong performance in agriculture and precious metals, there is still uncertainty surrounding the Papua LNG project.
“PNG businesses continue to be in a ‘holding pattern’ as the much-anticipated start date for the TotalEnergies-led Papua LNG project keeps getting delayed.
“The project is currently in its Front End Engineering Design (FEED) stage.
“The ongoing delay is expected to strain general economic sentiment, with the projected FX flows for the construction phase needed to stimulate business activity,” he said
“Inspite of the uncertainty and delay in Papua LNG, the increased activity in the agriculture sector is positive for PNG’s long-term growth,” said Mr Pawson.
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