NZ commodity prices rise 3% in May, led by a jump in apple, kiwifruit prices

Tuesday 6th June 2017

New Zealand commodity prices rose 3.2 percent as a broad-based strength across the country's locally produced raw materials was led by the continued surge in apple and kiwifruit prices.

The ANZ Commodity Price Index increased to 291.9 in May from 282.9 in April and was 26 percent higher than the same month a year earlier. That was led higher by a 12 percent gain in horticulture prices, with apple prices up a monthly 7.5 percent and kiwifruit prices rising 14 percent.

"A late picking season due to the wet weather and low chill hours meant the market was primed for new-season fruit to arrive," ANZ Bank New Zealand agri economist Con Williams said in a note. "A slower start for green (kiwifruit) exports and a higher proportion of gold, especially in Europe, is supporting average export prices."

Government data last month showed the value of fruit exports rose 3.4 percent to $444 million in April from a year earlier, for an annual gain of 14 percent to $2.77 billion, making it the country's fourth-biggest export commodity.

In New Zealand dollar terms, the index rose 4 percent in May and 22 percent in the year, leaving it 5 percent below the record high in March 2011.

Williams said the previous spike was due to dairy prices, whereas recent gains were across forestry, horticulture and meat as well, meaning it was "more widely spread across sectors, regions and individual businesses".

The index shows dairy prices rose 3.8 percent last month and were more than 50 percent higher than a year earlier, with higher prices across most milk powders and milkfats.

"Global prices were supported by lower peak milk flows in Europe's major producing countries such as Germany and France, due to cold spring conditions," Williams said. "Continued demand from China and broader Asia also continued to boost prices."

Meat prices rose 2.8 percent, with beef prices up 2 percent and lamb prices up 2.8 percent, although wool prices remained “lacklustre” with a 0.3 percent monthly decline taking the annual drop to 34 percent.

Aluminium prices slipped 0.4 percent in May having gained 23 percent over the past year, while seafood prices edged up 0.4 percent.

Wood pulp prices increased a monthly 2.6 percent and log prices gained 0.6 percent.

(BusinessDesk)

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