NZ commodity prices extend gain in April, March figures revised higher

Monday 6th May 2019

New Zealand commodity prices lifted in April and were significantly higher in March than previously reported, ANZ Bank’s monthly commodity price index shows.

The ANZ world commodity price index lifted 2.5 percent in April, following a corrected 4.1 percent rise in March, ANZ said. The index is now 2.1 percent higher than a year ago.

ANZ had previously said the index rose a monthly 1.4 percent in March and fell 2.1 percent on the year. Today's revision shows it rose an annual 0.6 percent in March.

In local currency terms, the April index rose 4.2 percent on the month and 8.4 percent on the year.

ANZ now says the NZ dollar index rose 4.1 percent in March and 5.3 percent on the year, having previously said it rose 1.4 percent in the month and 2.5 percent on the year.

According to ANZ, the indices for March were corrected due to an error in the dairy group. Butter, milk powders and cheese have all been corrected higher. The dairy group was published on April 3 with a 2.5 percent increase but due to a spreadsheet error, has been corrected to a 9.6 percent increase.

In April, dairy prices gained 4.4 percent month-on-month having moderated from the strong lift recorded the previous month.

"Markets continue to be supported by tighter global supply which should underpin milk powder and butter prices in the coming months. Milk supply is now falling away rapidly with just one month left in the current production season," said ANZ agri economist Susan Kilsby.

"Exporters are tidying up sales for current season product but are increasingly focusing on forward sales for the new season."

The meat and fibre index lifted 3.8 percent month-on-month in April with stronger prices recorded for both lamb and beef. "Both lamb and beef are benefiting from extra demand from China, as consumers look for alternatives sources of protein to fill the gap in the market caused by African Swine flu reducing pork supplies," she said.

The horticulture index fell 0.5 percent due to larger quantities of new season supply, said Kilsby. The kiwifruit export season is off to a strong start with export returns for gold varieties tracking well ahead of the previous seasons.

The forestry price index eased 0.7 percent on the month as softer prices for logs were only partially offset by stronger pulp prices.

Aluminium prices eased 1.6 percent month-on-month in April, giving up more than it gained in the two months prior. The recent easing in price has been driven by stronger global supply – particularly out of China – matched by softer demand.

(BusinessDesk)

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