Sharechat Logo

NZ commodity prices fall in November on weaker dairy

Tuesday 5th December 2017

Text too small?

New Zealand commodity prices slipped further in November, with dairy prices leading the pack lower although the softening was across the board.

The ANZ Commodity Price index slipped 0.9 percent to 291.9 in November and was up 6 percent in the year. In New Zealand dollar terms, the index was at 223.3, up 1.5 percent in the month and 12 percent in the year as the New Zealand dollar continued to fall against major trading partners.

The kiwi dollar has come under significant pressure due to political uncertainty after the change in government. The trade-weighted index was recently at 72.39 and was down 2.1 percent last month.

"All up, the cyclical top is in for New Zealand’s export values, with dairy prices under more pressure," ANZ Bank New Zealand agri economist Con Williams said. "Supply considerations will continue to hold sway, but solid demand in most markets and sectors should provide some durability. Combined with a lower NZD this is helping buffer local exporter returns."

Nine of 17 subcomponents fell and only five rose in the latest month, so the softening was broad-based, Williams said.

Dairy prices fell, with whole milk powder prices down 6.2 percent in the month and skim milk powder falling 6 percent. Williams said New Zealand production of whole milk powder had exceeded expectations and buyers are taking a "wait and see" approach as inventories build up in China, with skim milk powder hit by improvements in European milk supply and expectations the intervention scheme will be changed to a tendering process, which provides no defined price floor.

"The pressure on SMP has been depressing prices for other protein products too, such as casein and caseinates," Williams said. "In particular demand from the US and Mexico appears to have softened for casein." 

Meat prices held up, with lamb down just 0.5 percent, better than its usual seasonal fall and venison remaining at record highs. Seafood prices were flat.

Horticulture prices lifted 3.9 percent in the month, with kiwifruit bolstered by lower local supply and softer European production.

Forestry continued to gain, with wood pulp prices up 13 percent in the month on strong Chinese demand, low inventories and supply disruptions for other major suppliers. Log export prices were up 0.9 percent. Aluminium prices fell 1.5 percent as forced Chinese smelter production cuts came into effect. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar headed for 1.3% weekly gain on expectations of a Fed rate cut
RBNZ knock-back gives Resolution chance to low-ball AMP - Jarden
Rail hubs may not boost Napier Port log trade
O'Connor looks to overhaul Biosecurity Act, improve animal tracing
Denton Morrell undefended at liquidation hearing
Contact steam to heat Norske Skog pellet business secured
Air NZ to amend booking engine after lawyer’s complaint
Ross McEwan to take helm at NAB
KPMG says bank capital proposals will wreck havoc on dairy farmers
Mild weather saps Vector's June-qtr volumes

IRG See IRG research reports