By Corinne Podger and staff of Radio Australia
"Papua New Guinea, being a developing country, just does not have the resources - both financial and technical capacity - to deal with one of these outbreaks," Stanley Leahy, managing director of Zenag Chicken, told Radio Australia.
Mr Leahy has called for a much broader ban, in line with Japan which has banned all poultry products from Australia.
PNG's chief veterinary officer, Dr Nime Kapo, said the ban was expanded as a precautionary measure.
"We've suspended uncooked poultry products including chicken meat and eggs from the state of New South Wales," Dr Kapo said.
"Everything that has been approved and in transit prior to the ban is all going to be checked at the port of entry anyway."
While the H7 bird flu is not the same as the H1 virus that can kill people, it can destroy entire flocks and can survive in eggs and raw meat.
Australian authorities are confident the outbreak has been contained to a single free range chicken farm.
"We are confident that the outbreak is confined to a single property in New South Wales and that's a free range layer hen farm," said Dr Mark Schipp, Australia's chief veterinary officer.
"That property has now been completely depopulated so all of the infected birds have been disposed of and the property is now under decontamination."