Industry Focus: Kava, the green gold of the Pacific

Kava is an important commodity with rich cultural, social, and economic significance across the Blue Pacific. As the rise of multi-billion-dollar international nutraceuticals market becomes accessible through the easing of import regulations, the kava industry offers huge potential for global economic opportunities.

Across the Blue Pacific, kava has long been woven into the very fabric of life. For many, it is a ceremonial crop connecting the past with the future, and each generation to the next. As an important commodity with rich cultural, social, and economic significance, kava is often considered the ‘green gold of the Pacific’[1]. An industry ripe with opportunity, recent years have seen market demand for kava rise as the multi-billion-dollar international nutraceuticals market becomes accessible through the easing of import regulations. This provides exciting prospects for future developments of the kava industry, as well as the Pacific businesses and communities who thrive within it.

In its most basic form, kava is a root crop that contains kavalactones, psychoactive ingredients that create a relaxed yet clear-headed state. According to the Pacific Health Dialog Journal, unlike alcohol, kava does not cause marked euphoria or lead to emotional changes, such as disinhibition, nor is it generally considered to be addictive. Prized for its anxiety, stress- and pain-relieving qualities, kava is traditionally consumed as a beverage in community events throughout the Pacific, chiefly at ceremonies including funerals and marriages.

In the 1970s, the nutraceuticals industry recognised kava’s qualities, and saw an opportunity to create products that could be used as alternatives to sleep-inducing and anti-anxiety drugs. A burgeoning export trade out of the Pacific to Europe and the United States developed in the 1990s, but was significantly affected by a European ban on imports. This ban was lifted in 2015 by German courts after a World Health Organization report concluded that consumption of kava as a beverage has been shown to cause no irreversible, long-term health problems.

Though kava is important culturally, recent years have seen many Pacific Island communities beginning to export a powdered form of the root to countries all over the world, for both medicinal and social purposes, a move that has led to significant economic impact down the supply chain. Grown by smallholder farmers across the Blue Pacific, kava has fast become a thriving cash crop for local farmers, primed for further growth.

According to a recent Pacific Horticultural & Agricultural Market Access Program (PHAMA) report, in Fiji alone, 1 in 8 rural households are involved in the crop’s cultivation, with a further 3,000 households earning an income through kava trade and retail operations. In 2020, Fijian kava exports were worth over A$43.6 million and in 2019, Vanuatu’s kava exports were worth A$48.4 million, with these figures set to grow in coming years.

While some of these exports are to other Pacific Island Countries (PICs), larger markets include New Zealand, New Caledonia, Europe, and the United States, partly due to the large Pacific Island communities living there. The bulk of this trade is associated with selling kava as a beverage, with a growing quantity being exported as an ingredient, for nutraceutical and pharmaceutical products.

Within the region, Australia remains the notable export market exception, having banned kava imports over 20 years ago due to concerns that kava was contributing to negative health and social outcomes in some Indigenous communities. This is set to change however, with recent announcements by the Australian Government to step up commitments to the Pacific, including the launch of the Kava Pilot Program, a two-year trial period in which import regulations on kava-related products will be eased. Phase 2 of the Kava Pilot Program began on December 1 2021, allowing for kava to enter Australia on a commercial basis, significantly increasing trade opportunities for Pacific kava growers and exporters. This is an exciting step forward for the Pacific kava industry, and one that come with many exciting opportunities for the region.

With the global kava market expected to exceed US$210 billion (AUD$309 billion) by 2026, the projected impact of the industry is significant. Kava has led to the empowerment of local communities through the supply chain, creating sustainable incomes, and improving livelihoods, making kava as deeply valuable economically as it is socially.

As import regulations ease and international demand grows, exciting opportunities for Pacific Island businesses to enter new markets grow. Simultaneously, kava culture locally is as alive today as it was centuries ago. Kava, the longstanding cultural touchstone of the Pacific, is on a steep trajectory to become an emblem of opportunity for a brighter and more equitable Pacific future.

 

[1] Smith, R., 2021. CRASSH: Risk and Investment in the Pacific’s ‘Green Gold’ | Conservation Research Institute.