Balsa is a fast-growing tree that produces a very light wood used mainly to make model aircraft. The wood is also used in full-scale aircraft, table tennis bats, surfboards, fishing lures and as insulation. Balsa exports from PNG generated an average of K6 million per year from 2004 to 2006, which was about 1% of the value of forest product exports in this period. The value increased to K10 million in 2007. Commercial production of balsa wood in PNG is presently restricted to the north-east lowlands of the Gazelle Peninsula in East New Britain Province. Balsa is currently cultivated in areas below 300 m in altitude and where mean annual rainfall ranges between 2000 mm and 3000 mm, but it may grow well in other environments in PNG.
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Adoption and history
Balsa was introduced to PNG in the late 1930s, with further introductions made between 1948 and 1961, mostly to East New Britain Province (ENB). The commercial potential of the crop was investigated in 1952 and 1956 and trial shipments were made to Australia. By the 1960s, a processing mill had been established at Keravat in ENB and a small industry had started to develop on the Gazelle Peninsula. In the 1980s and early 1990s, smallholder participation in the balsa industry on the Gazelle Peninsula was supported by extension activities provided by the National Department of Forestry and the ENB Division of Primary Industry. However, by 1995 extension activities had ceased, which resulted in harvesting rates exceeding replanting rates and a corresponding decline in available balsa. This situation was compounded by the Rabaul volcanic eruption of 1994, which defoliated many trees and caused activity in the industry to cease.
Following the eruption, recognition of the economic potential of balsa, coupled with concerns about the lack of extension services and information about the state of the industry, led provincial and national
authorities to request overseas assistance. This resulted in the establishment of the East New Britain Balsa Industry Strengthening Project, funded by the International Tropical Timber Organization (ITTO).
The project operated from 1996 to 2003.
Distribution of production and planting
On the Gazelle Peninsula in 2001 there were more than 200 hectares of smallholder balsa plantings and over 80 hectares of private, company-owned balsa plantations. The number of balsa growers in the Gazelle Peninsula area is unknown, but was about 200 in 2001. The area planted, and possibly the number of growers, has increased considerably since then.
Balsa is also grown in other parts of PNG including on New Ireland, Buka, Bougainville and Nissan islands, and in West New Britain and East Sepik provinces. However, much of this balsa cannot be marketed because there are no milling facilities in these areas. Furthermore, balsa matures within four to five years of planting, when it must be harvested or lose its marketability, and many of the trees in these areas are already too old for commercial harvest.
Levels of production
No data is available on balsa production or exports prior to 1996. Annual production, measured in terms of the volume of wood sold to the three balsa mills, averaged 10 000 m3 over the period 1997–2001. Export of milled timber was 2000–4000 m3/year between 1996 and 2004, but increased to 11 000 m3 in 2007.
Processing, exporters and markets
Three mills were operating on the Gazelle Peninsula in ENB in 2001 and these processed balsa purchased from both smallholder and commercial plantation producers. By 2007, there were four mills in ENB, and it was anticipated that this would increase to seven mills by late 2008. The East New Britain mills could conceivably cater for balsa produced in other parts of PNG.2 However, in order to be economic, the balsa would have to be processed into ‘flitches’ before being shipped to East New Britain for final processing, which means that flitch-processing plants would have to be established in the other balsa-growing areas. Economic potential would also depend upon adequate roads and shipping.
The balsa mills in East New Britain Province export processed balsa in the form of planed sheets, blocks and strips of various shapes and sizes. Until 2003 balsa was exported to Australia, China, Germany, Italy and the United Kingdom, but since then a greater proportion has gone to China and India. In 2007 the main export destinations were China (43%), India (20%), Australia (14%) and Germany (10%).
Because balsa is a fast-growing crop, it can be integrated into village agricultural systems. It has more in common with an agricultural crop than a timber crop. The volume and value of balsa grown in ENB has
grown rapidly since 2005. The area planted to balsa has expanded and some plantations have replaced old coconut stands with balsa. While prices remain high, the prospects for further growth are good. There is
potential for expansion to other lowland areas, but this would depend on mills being established there.