Papua New Guinea's foreign exchange inflows are becoming increasingly uneven as El Niño-driven production declines and logistical delays weigh on agriculture and mineral exports, according to BSP Group General Manager Treasury and Markets, Rohan George.

George says the foreign exchange market recorded solid turnover during the September quarter, but key export-driven inflows are coming under growing pressure as dry weather conditions, weaker agricultural output and timing delays disrupt the flow of foreign currency into the economy.

He warns that while the mining sector continues to anchor foreign exchange inflows, emerging risks, particularly the impact of El Niño and shifting commodity prices, could place further pressure on liquidity in the months ahead.

His comments come as businesses continue to report extended processing times for foreign exchange orders.

Mining export receipts remained the primary source of foreign exchange inflows during the quarter, supported by stronger production levels and firm copper prices.

George highlighted that copper continues to provide a strong foundation for mineral earnings, driven by growing global demand linked to electrification and the expansion of artificial intelligence-related data centre infrastructure.

However, he notes that gold prices are expected to face pressure in the final quarter of 2026, creating a more mixed outlook for mineral sector inflows, whilst highlighting that agriculture, traditionally a major contributor to foreign exchange of liquidity, is showing signs of weakness.

George says drier conditions associated with El Niño are reducing agricultural production and export volumes, limiting Papua New Guinea's ability to fully benefit from favorable global commodity prices and at the same time, noting that logistical disruptions have delayed the timing of mineral sector foreign exchange receipts, adding further strain to market liquidity.

“Risks to PNG’s FX inflows largely stem from further impacts of El Niño conditions,” George says.

“While El Niño has supported global prices for key agricultural commodities, drier domestic conditions are weighing on agricultural production and export volumes.”

The report says the combined impact of volatile commodity markets, weather-related production declines and logistical bottlenecks could leave Papua New Guinea increasingly reliant on mining sector inflows at a time when global economic conditions remain uncertain.

BSP says it will continue to closely monitor liquidity conditions through the final quarter, while businesses are being encouraged to plan ahead for potential delays in foreign exchange availability.