Combine sterile potting mix with vermiculite in a 1-1 ratio. Pour it into a large planting pot. Papaya seedlings are intolerant of root disturbance, so starting in a small pot and transplanting into a large one later may kill the seedling. Moisten the planting medium until it is thoroughly wet and set the pot aside to drain.
Place 1/8 cup fungicide powder in a bag and drop the seeds in. Secure the top of the bag and shake it gently to dust the seeds with the powder.
Plant the papaya seeds 1 inch deep and cover with a 1/8-inch layer of sand.
Place the pot on a heat mat, set to 80 degrees Fahrenheit, in a bright area, out of direct sunlight. Keep the soil slightly moist, and the papaya seeds should germinate within two to five weeks.