NZ commodity prices rise in June, led by seafood, dairy

Tuesday 5th July 2016

New Zealand commodity prices rose for a second month in June, led by more seafood and dairy products, although an appreciating kiwi dollar limited those gains in local currency terms.

The ANZ commodity price index rose 3.7 percent last month, after a 1.1 percent increase in May. On an annual basis, prices were down 5.4 percent. In New Zealand dollar terms the index rose 0.3 percent, adding to a 2.5 percent increase in May, and an annual decline of 5.9 percent. The trade-weighted index rose 4.9 percent in June.

"There was broad-based strength across all the major categories. However, producers won't be celebrating too loudly," ANZ Bank New Zealand agri-economist Con Williams said in his report. "In many cases, world prices are still below the same time last year and the NZD rose over the month too."

New Zealand's biggest commodity export - dairy products - has been hampered by low global prices as European and North American farmers produce more. Prices have recovered somewhat from last year's slump, and NZX futures indicate prices at the upcoming GlobalDairyTrade auction will rise between 3 percent and 5 percent.

Today's data show seafood prices led local gains, up 8.2 percent with a notable increase in the price of hoki and squid. NZX-listed fishing group Sanford has previously said the hoki catch has been lower as it tries to align supply withy demand.

Dairy prices rose 4.8 percent in June, with cheese prices up 9.2 percent, skim milk powder gaining 8.4 percent and whole milk powder increasing 3.7 percent. ANZ's Williams said skim milk prices are catching up with those in Europe, while whole milk prices were bolstered by the lower seasonal supply from New Zealand.

Horticulture prices extended their gain, up 4.2 percent as new season cops reached markets in Europe and Asia, while meat prices increase 2.6 percent due to a smaller lamb crop. Forestry prices increase 1.7 percent in June and aluminium prices were up 2.3 percent in the month.

BusinessDesk.co.nz

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