Commodity prices rise for third month

Thursday 4th June 2009

New Zealand commodity prices rose for the third straight month in May as wool climbed from a 23-year low and beef and dairy products gained.

The ANZ Commodity Price Index rose 2.7% last month, bringing its three-month advance to 6.5%. Wool rose 9.1% from April while beef prices climbed 6.1% and dairy rose 5%. Sawn timber gained 4.1%.

In New Zealand dollar terms, prices weakened as the kiwi strengthened last month. The ANZ NZD Commodity Price Index fell 1.5% in May, undermining the benefits of higher world prices. Fonterra Cooperative Group last month forecast a lower milk payment for 2010, citing the impact of a stronger local currency. The kiwi dollar was recently at 63.12 US cents having climbed from below 50 cents in early March.

“The rising NZ dollar is going to sap the strength of any export sector surge, and it is unreasonable to expect such anyway until the world economy starts recording good growth,” Bank of New Zealand chief economist Tony Alexander wrote in his weekly overview.

The reading for dairy products contrasts with this week’s results from Fonterra’s online milk powder auction, where prices dropped 12% amid concern protectionist measures by the US and the EU are undermining a potential recovery.

The average price of milk powder sank to US$1,886 per metric ton, according to results posted on the GlobalDairyTrade website, down from US$2,144 last month. In New Zealand dollar terms, prices tumbled 19%.

Aluminium prices gained 2.5% in the latest month in world currency terms, according to ANZ Bank’s commodity price index. Lamb edged up 0.7% and venison gained 0.3%.

Seafood fell 5.1%, the biggest decline in May, while logs slipped 4.6%, apples declined 3.2% and skins fell 1.6%.

Businesswire.co.nz

Comments from our readers

No comments yet