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NZ commodity prices rise for third straight month; dairy, meat lead gains

Wednesday 3rd August 2016

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New Zealand commodity prices rose for a third straight month in July, led by dairy products, aluminium and meat, although the strong kiwi dollar limited the benefits for local producers.

The ANZ commodity price index rose 2 percent last month, bringing its three-month gain to 6.9 percent. In New Zealand dollar terms, prices have gained just 2.5 percent in the past three months and are 5.7 percent lower than in the same period last year.

The release of the commodity price index follows the results of the latest GlobalDairyTrade auction, which showed the GDT price index jumped 6.6 percent to US$2,436, while the price of whole milk powder, the biggest product New Zealand sells by volume, rallied 9.9 percent to US$2,265 a tonne. Dairy rose 4.1 percent month on month in the ANZ index, with casein up 7.8 percent, butter gaining 5.2 percent and milk powder up 4.1 percent.

Meat rose 2 percent in the latest month, led by a 4.4 percent increase in lamb prices and a 2.1 percent gain for beef. Aluminium rose 2.2 percent.

"World sheepmeat prices have primarily improved because of a significant drop-off in New Zealand supply," said Con Williams, agri economist at ANZ New Zealand. "This is due to a smaller lamb crop in 2015, some re-stocking and high early season turn-off." Beef prices were helped by lower seasonal supply within the US, he said.

Seafood prices were largely unchanged, forestry prices fell 1 percent and horticulture declined 1.4 percent.

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