EXPORT revenues from most of Papua New Guinea’s non-mineral exports will fall this year. This is because of the export commodities’ falling prices in the world market and a drop in production, according to the International Monetary Fund (IMF) in the September issue of its commodity price forecasts.
The decrease in prices, however, is only for the short-term and reflects the downturn in global economic activity, according to the Bank of PNG.
The banks said the liquefied natural gas (LNG) project was not considered in the current projections until more concrete details become available.
At the end of this year, the gross foreign exchange reserves are projected to be around K6,305.4 million, sufficient for 7.8 months of total imports and 12.4 months of non-mineral imports.
In the four-page advertorial on Wednesday, Central Bank Governor Sir Wilson said the decline in the volumes of most of PNG’s major non-mineral commodities, palm oil being the only exception, was mainly due to lower production as a supply response to lower international prices.
He said the same was also true of the country’s mineral sector, adding that except for gold, export volumes for the other mineral commodities were also projected to decline compared to 2008.
“The decline in copper exports reflects the maintenance work on one of Ok Tedi’s processing plants, lower ore grades and delays in shipment.
“The increase in gold production is due to the upgrading of the processing plant at the Lihir mine, the start of production at the Simberi and Hidden Valley mines and the mining of higher ore grades from existing mines.
“The export volumes of the mining sector are projected to increase in the medium-term mainly due to the commencement of production from the Ramu nickel/cobalt mine in the second half of next year.”
In the petroleum sector, production is projected to decline this year and over the medium-term due to the natural decline in reserves at the existing oilfields,” Sir Wilson said.