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NZ commodity prices post record 12.6 percent surge in April, led by dairy products

Thursday 2nd May 2013

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New Zealand commodity prices surged last month by the most since the ANZ Commodity Price Index was created in 1986, driven by skim and whole milk powder, butter and cheese.

The index rose 12.6 percent in April to a record high 333.5, as 12 of the 17 commodities rose, three fell and two were unchanged.

April's gains may mark the high point for the time being, with dairy prices dropping 7.3 percent in the latest GlobalDairyTrade auction overnight on signs drought is abating at home and doubts grow about the pace of global economic growth.

"As we saw in last night's auction, dairy prices are now starting to pull back from their record high levels, as recent rain has eased concerns about the drought and as attention turns to next season's supply," said Westpac Banking Corp economist Michael Gordon.

Skim milk powder climbed 39 percent in April, led by whole milk's 32 percent gain, while butter prices rose 15 percent and cheese gained 8 percent.

Among non-dairy commodities, pelt prices rose 6 percent, sawn timber gained 4 percent, and logs and wood pulp rose 3 percent. Apples, casein, wool and seafood recorded increases of 0.5 percent to 1 percent.

Aluminium prices fell 2 percent, lamb and beef fell about 1 percent and kiwifruit and venison were unchanged in the month.

The gains in prices were enough to offset a strong New Zealand dollar. The ANZ NZD Commodity Price Index gained 10.2 percent in April, to be up 17.4 percent from a year ago.

BusinessDesk.co.nz

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