The Morobe Provincial Aids Committee in Papua New Guinea says about a third of the population in Lae is suspected to be HIV positive.
The newspaper, The National, says the estimate was given by the Committee's Strategy Coordinator Joan Ganoka.
Her statement was based on a study at West Taraka and Kamkumung area between 2003 and 2004.
The study found that 2.5 percent of the population is either HIV positive or has AIDS.
But she says there has been an increase in Lae City, which serves as a transmigrational route.
Ms Ganoka says as well as the incidence of suspected cases in Lae she suspects that nearly all settlements and suburbs of Lae has the virus.
She says that these days, sex in exchange for gifts is everywhere, affecting everyone, including Christian leaders and those with strong morals.