Amid the general merriment the potential buyers wandered away, leaving the trader offering a confused explanation about sheath dimensions being related to tribal tradition rather than status or physical size.
Markets anywhere in Papua New Guinea are interesting but Madang offers a more diverse range of goods than most - it is at the end of the great Highlands Highway, and so draws from both the highlands and the coastal areas.
This particular trader's penis sheaths, for instance, were in a wide range of styles, from decorated gourds - the usual, traditional variety - to carved wood, some sort of bone, assorted ruminant horns and what looked like woven palm leaves.
His display was part of a souvenir mini-market, no doubt attracted to the port area by the arrival of about 100 tourists like me from the expedition ship Orion.
Not far away, in the middle of town in the spacious central market complex, there's an even bigger array of goods, though aimed more at locals than tourists.
In the main covered area is just about every fruit and vegetable known to mankind, much of it from the incredibly fertile soils of the Highlands, with piles of pineapple and sweet potato, cassava and cabbage, peas and pandanus nuts, taro and tomato, silverbeet and sago, coffee and coconuts.
A smaller pavilion holds the rather less mouthwatering - to visitors - tables of meat and fish including species and bodyparts that you wouldn't find in New Zealand supermarkets.
The leafy trees which flourish in the grounds around the market buildings house the clothing department, with rows of shoes on the ground, secondhand T-shirts from Australia neatly pressed and displayed on plastic sheets, and colourful dresses hanging from wire display frames and billowing in the breeze, while below them smiling women transform brightly dyed string into bilum bags.
Around the boundary fence is the souvenir section with carvings, shell and seed necklaces, bark paintings, pigs' tooth pendants and more bilum bags - but no penis sheaths - hanging from the wire mesh.
An even better place to see souvenirs is the replica spirit house in the grounds of the Madang Resort Hotel nearby, where local traders offer an amazing array of artefacts, from ferocious spears and scary wooden masks to charming necklaces and cute carved animals.
Close by is the local equivalent of a McDonald's, an area of park where people from nearby islands paddle in each morning bringing fresh produce - small, sweet fish, peppers, yams, cassava and bright yellow marrows - cook over open fires and spread the food out on banana leaves.
Around lunchtime all the office and shop workers from downtown Madang converge on the park, buy snacks and sit in the shade of the trees for lunch. The food looked so delicious I was almost sorry that a buffet lunch awaited on board Orion.
The great attraction of all these places is that the people are so friendly. For instance, when I signalled to a woman using a palm-leaf to keep flies off her display of goodies that I wanted to take a photo, she gave a huge smile.
"Welcome," she replied, then checked if the pose was satisfactory. "Is this okay for you? I can move." Similarly, when I wanted to take a picture of a woman selling dresses at the main market, she quickly picked up a bilum bag she was making, explaining, "Is a better photo for you."
Up in the Highlands, where the locals have a reputation for being feisty, the traders selling vegetables and nuts on a plot of waste ground near Mt Hagen Airport seemed delighted to see a visitor - and the mere sight of a camera was enough to draw big smiles.
Over the road in the airport parking area the fire fence glowed like a rainbow because of all the woven bilum bags on display.
I actually wanted a picture of just the bags but it was hard to achieve because all the traders were keen to be photographed.
"Hey, take my photo, I am making this bag," called one lady, waving her half-completed bag in my direction. "Mister, see my hat," cried another who was selling the distinctive woven Highlands caps.
The great advantage of a digital camera is that it's easy to make people happy by taking their pictures and letting them see it on the screen. No one seemed to mind that I had no plans to buy anything.
Even in the capital, Port Moresby, which has a scary reputation, I enjoyed a pleasant stroll around a couple of the unofficial markets which seem to spring up on any unoccupied piece of land, and the traders there were uniformly friendly.
In fact, the only sign of trouble came at the big market in the Highlands town of Tari where, alongside the usual piles of vegetables and clothes for sale, men were throwing darts at boards hanging on poles, apparently in the hope of winning prizes.
Seeing my interest in their contest, several of the players called out to have their photo taken. But when I produced my camera the proprietor of this gambling parlour emerged shaking his fist. "No, no," he shouted angrily. "No camera. You go away."
Fair enough. I don't believe in photographing someone without permission. And it just goes to show you can meet grumpy shopkeepers anywhere.
CHECKLIST
Getting there: Air New Zealand offers direct flights from Auckland to Cairns and Brisbane.
Air Niugini has daily flights from Brisbane and Cairns to Port Moresby.
Orion cruises: Orion Cruises has two or three expeditions to PNG each year. Most cruises visit Milne Bay, Samarai and Kwato Islands, Fergusson Island, Tufi, Tami Islands, Madang, Sepik River and Rabaul.
Online: www.papuanewguinea.travel
Jim Eagles visited Papua New Guinea markets with help from Air New Zealand, Air Niugini, the Tourism Promotion Authority of Papua New Guinea and Orion Cruises.
