Treasurer says Papua New Guinea’s Budget deficit far worse than expected, Phillipines to export 5000 mt of high quality rice to PNG, and Paradise Foods sells its spice business. Your weekly digest of business news.

Treasurer Ian Ling-Stuckey

Papua New Guinea’s Treasurer, Ian Ling-Stuckey, predicts ‘big and painful cuts’ in this week’s Supplementary Budget. He says the state of the country’s economy is far worse than previously thought with a budget deficit of K4.64 billion. Ling-Stuckey said not only was the deficit greater than forecast, but his updates, compiled with the assistance of the International Monetary Fund, show ‘fake’ estimated earnings of K13.02 billion, K1.24 billion less than in the original 2019 Budget. (Post-Courier)

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Meanwhile, State Enterprises Minister, Sasindran Muthuvel, says the government owes US$1.8 billion to commercial banks, at a 7.5 per cent interest rate. He said K157 million is owed to various state-owned enterprises, including K57 million to PNG Power. He said state-owned bmobile owes about K96 million to Bank South Pacific, and about K130m by Kumul Petroleum Holdings to the ANZ. (Post-Courier)

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Philippines’ rice farmers are preparing to export to PNG an initial shipment of 5000 metric tons (MT) of premium and organic rice, under a deal signed earlier this month in Port Moresby. The provincial Mindanao Development Authority is currently preparing export documents. East Sepik Governor Allan Bird, is quoted as saying PNG rice consumers ‘are willing to pay a premium price for good eating quality rice’. (Business Mirror)

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Group CEO, Paradise Foods, James Rice with Francis Wagaia, Managing Director Rhicornese Holdings.

Paradise Foods has sold its spice business, Paradise Spices, to Rhicornese Holdings, the parent company of LD Logistics, in order to focus on its concentrate on its Queen Emma chocolates and biscuits. Karina Makori, General Manager of Rhicornese, said local farmers will have an easy access to the markets through the company’s existing networks and logistical support. (Paradise Foods)

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Swiss firm Pala Investments has announced it intends to buy Cobalt 27 Capital Corp for C$501 million (K1.3 billion). Pala’s offer – equivalent to C$5.75 per share – represents a 66 per cent premium to Cobalt 27’s closing share price of C$3.47 on June 17. Cobalt 27 currently owns a joint venture interest (8.56 per cent) in the Ramu nickel-cobalt mine in Madang Province.

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OK Tedi Mining Ltd has announced a 2019 interim dividend of K100 million. Chairman Sir Moi Avei, said the dividend is on top of funding an investment of more than K700 million to replace and relocate the mine in-pit crusher and meet annual sustaining capital requirements of about K160 million. The company has maintained its debt-free position. (The National)

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The government is planning to contract freighter aircraft as part of its “Agriculture in Aviation” project.  Department of Agriculture Acting Secretary, Daniel Kombuk, said a Boeing 737 freighter will service the Manila–Komo–Brisbane route, and raised the possibility of another aircraft to fly the Mt Hagen, Goroka and Rabaul routes to bring produce to export points. (RNZ Pacific)

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Violence is setting back the economy of PNG,  affecting lives, investment, education, health and the well-being of people in this country, according to EU Diplomat, Rene Mally. He made the comment when he opened a K5 million project funded by EU that included housing, a community health centre, and community assistance programs. (The National)

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India has announced  a US$150 million (K510 million) credit facility which Pacific Island nations can access to fund solar, renewable energy and climate-related projects based on the recipient country’s requirements. The Indian Prime Minister, Narendra Modi, made the announcement at the United Nations General Assembly in New York. (Samoa Observer)

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It’s estimated that about 1500 to 2200 million of the estimated 30,000 fish aggregating devices (FADs) used in the Western and Central Pacific Ocean wash up on beaches each year, mostly in PNG and the Solomon Islands. This damages coral reefs and potentially alters the distribution of tuna. Researchers led by Lauriane Escalle of the South Pacific Community based in Noumea report that there is no obligation on fishing companies to remove the drifting devices. (Nature)

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Photograph of the week

One of the international chocolate manufacturers at Nimesol Village in East Yangoru LLG. Manufacturers demonstrated how PNG farmers harvest the cocoa beans and undertake the fermentation process in preparation for export. (Credit: Psyie Yehi via the East Sepik Development Forum 2050).