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Surging dairy prices underpin autumnal boom in NZ commodities: ANZ index

Monday 3rd May 2010

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Surging dairy prices underpinned a new record high in the ANZ Commodity Price Index as local milk production begins to wind down while farmers in the Northern Hemisphere struggle to get started.  

The ANZ index jumped 4.9% to 235.2 in April, with a 9.9% increase in dairy prices, a 10 year high for pulp and an across-the-board rise in all measured commodities.

In New Zealand dollar terms the index rose 3.8% to a new high 172.8, despite its recent strength against major trading partners' currencies.

The kiwi dollar recently traded at 72.79 US cents from 72.81 cents on Friday in New York.  

Fonterra Cooperative Group’s online trading platform will hold its monthly auction on Tuesday in the US after the average price of whole milk powder surged 21% to its highest level since the first auction in July 2008.

The world’s largest dairy exporter raised its forecast pay-out to farmers last week after prices on its globalDairyTrade platform more than doubled from a trough in July.  

Nine other commodities reported gains, while three were unchanged.

Skins were the biggest gainer up 10.1% to an 18-month high, while wood pulp prices hit a 10-year high, gaining 7.7%.

Aluminium prices rose 4.6%, beef climbed 4% and log prices increased 3.4%. Sawn timber prices advanced 2.1%, while seafood, wool and sheapmeat increased 1.7%, 1.2% and 0.2% respectively.

No commodities on the index fell last month.   

“Since the start of the series in 1986 there have only been five occurrences of such a strongly synchronised lift,” said ANZ New Zealand economist Steve Edwards in his report. “The last time was in May 2006.”

Rising commodities have supported New Zealand’s economic recovery over the past 12 months after it climbed out of its deepest recession in 18 years in the June quarter last year.

Central bank Governor Alan Bollard said New Zealand’s trading partners had recovered faster than expected and this had filtered through to the country’s exports.

 

 

Businesswire.co.nz



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