MAJOR agriculture commodities are expected to rebound from their deteriorating performance next year.
This is because the 2010 National Budget is aimed at promoting rural sector which has been the major contributor to the PNG economy.
Under the Government’s development budget, rehabilitation of large plantations received an allocation of K26 million while the efforts to control cocoa pod borer got K5 million.
“The contribution to overall growth of agriculture, forestry and fisheries sector was smaller this year as a result of low coffee, cocoa and copra production.
“But we expect a rebound next year with better growing conditions and high prices,” Department of Treasury Secretary Simon Tosali said.
He was speaking yesterday at the budget press lock-up at the National Parliament, Port Moresby.
Two new mines in Ramu Nickel in Madang province and Hidden Valley in Morobe and the extended Lihir Gold mine in New Ireland are expected to boost domestic economy starting next year.
Production at Ramu NiCo’s nickel and cobalt project, Hidden Valley and Lihir’s million ounce plant upgrade (MOPU) would pave the way for growth after a decline in the performance of major export commodities late last year and this year.
The mineral commodity prices underlying the 2010 Budget proved conservative against current prices and were projected at: gold – US$860 (K2,293) per ounce; copper – US$5,200 (K13,867) per tonne; and oil – US$67 (K179) per barrel.
Petroleum is expected to decrease more than 50% starting last year (2008) to 2014.
The declining in production from maturing oil fields such as Kutubu, Moran, Southeast Manada and Gobe is expected to pick up by 2014 at the start of production during LNG project.
The mining and quarrying sector are expected to contribute significantly to the overall gross domestic product (GDP) growth next year largely due to start of production at Ramu NiCo and Hidden Valley and MOPU.
Generally, start of LNG production either from direct participation (construction) or indirect in supporting the project and its employees (wholesale and retail sector) should see growth in all sectors, Mr Tosali said.