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NZ commodity prices post 11th straight monthly gain

Monday 1st February 2010

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The price of raw materials produced in New Zealand rose for the 11th straight gain in January, led by skins, logs and beef, according to the ANZ Commodity Price Index.  

Prices gained 0.4% last month from December, for an annual gain of 37%, as demand for New Zealand’s so-called soft commodities bounced back after the global financial crisis forced companies to cut down their inventories. Seven commodities recorded stronger prices, while two declined through January, including dairy.  

“Of the two commodity prices to record a decrease, dairy prices recorded the larger drop – the first price reduction we’ve measured in seven months,” economist Steve Edwards said in his report.  

The price of whole milk powder fell 7% last month on Fonterra’s online trading platform after dairy prices surged some 95% since July. Rising dairy prices underpinned the gains in New Zealand’s primary sector last year though much of this was offset by a strong kiwi dollar.  

The currency shed 3% against the greenback last month, though Edwards said it strengthened “relative to all our major partners in January,” which resulted in a 1.2% fall in the New Zealand dollar commodity price index. On an annual basis the index rose 5%.  

The price of skins led the gainers in January, rising 12%, while log had the second biggest rise at 9.4%. Beef prices advanced 5.8%, while aluminium gained 1.9% and lamb increased 1.8%. Seafood prices edged up 0.9% and sawn timber prices were up by 0.5%.  Dairy prices dropped 2% in January from a month earlier, while wool fell 0.6%.

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