NZ commodity prices fall 1.8% in December; down 13% in 2015

Tuesday 12th January 2016

New Zealand commodity prices slid 1.8 percent in December, taking the annual decline to 13 percent, amid weak demand in global markets.

The ANZ Commodity Price Index fell to 238.0 in December, from 242.3 in November and 273.4 in December 2014. The New Zealand dollar index fell 3.9 percent in December, although a decline in the kiwi limited the annual drop to 1.1 percent

In December, dairy, meat and horticulture prices all declined. That was offset to some degree by higher forestry and aluminium prices, while seafood prices were unchanged. International dairy prices fell 3.5 percent in December and in New Zealand dollar terms were back 5.6 percent for the month.

"Weakness centred on milk powder prices as general commodity sentiment, high European milk supply, weak Chinese import demand and other major importer/buyers generally being well stocked weighed on prices," ANZ rural economist Con Williams said in his report. "Milk-fat products performed slightly better, with butter prices up 5.2 percent" for the month.

Non-dairy prices fell for an eighth consecutive month in December, down 0.2 percent. Beef slipped 4.9 percent, while wool declined 1.4 percent. That was partly offset by a 1.7 percent increase in lamb prices and a 2 percent rise in prices for skins and hides.

Horticulture prices dropped 3.6 percent, during the off-season for New Zealand's major crops, Williams said.

A 4.6 percent gain in log prices lifted overall forestry prices, supported by lower Chinese inventory levels and strong domestic demand, he said.

BusinessDesk.co.nz

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