Thursday 2nd July 2009 |
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New Zealand commodity prices flattened, with food price weakness offset by higher sawn timber and aluminium prices.
The ANZ Commodity Index was up 0.2% last month in its fourth consecutive gain. The price of sawn timber jumped around 14% in June, the most of the eight exports that gained, while dairy prices slipped 3.3%, a trend mirrored in the 3% decline on Fonterra Cooperative Group’s globaDairyTrade online auction for milk solids today.
In New Zealand dollar terms, the price of raw materials dropped 5% to a two-and-a-half year low, as the kiwi traded between 62 US and 65 cents in June.
Fonterra blamed the resilience of the currency for the 13% decline in its forecast payout for the 2010 season to $4.55 per kilogram of milk solids.
In a statement, the world’s largest dairy exporter said consumers were taking a more conservative approach with their purchasing. “Milk supply globally is declining sharply, but on the other hand recessionary conditions mean consumers have reduced their purchases of dairy products,” said Kelvin Wickham, managing director of Fonterra Global Trade.
The US Department of Agriculture reintroduced subsidies for dairy farmers at the end of May, which may have contributed to the weaker dairy prices. Professor William C. Bailey, chair of the department of agriculture at Western Illinois University, said there was a still a possibility of subsidy race between the US and Europe.
Aluminium prices gained 7.9% in June, the second largest rise in world currency terms, according to ANZ Bank’s commodity price index. Skins increased 4.7% while wood pulp prices gained 3.5%.
The price for kiwifruit slipped 3%, while apple prices dropped 2.8%. Seafood slipped 2.7% in its eighth consecutive monthly decline.
Businesswire.co.nz
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