July commodity prices fall

By Phil Boeyen, ShareChat Business News Editor

Thursday 2nd August 2001

Prices for New Zealand's commodity exports fell in July for the second consecutive month but are still above last year's levels.

The ANZ World Commodity Price Index, which measures world market prices for New Zealand's 17 main export commodities, fell 2% last month, although a weaker dollar meant the New Zealand Dollar Index only fell half a percent.

World sawn timber prices fell 21% during July, aluminium fell 3.1% and lamb prices fell 3.6%, however apple, kiwifruit and beef prices were higher.

ANZ chief economist, Bernard Hodgetts, claims the fall in prices over the past couple of months is actually fairly minor when put in perspective.

"Many people have expected to see a larger fall in commodity prices due to the global slowdown.

"The pace of world activity is undoubtedly an influence on commodity markets but it's not the only influence - supply conditions within individual commodity markets are very important and generally speaking are working to our favour at present."

Mr Hodgetts says the persistent weakness in the New Zealand dollar is also helping to sustain recent price gains.

"We feel the risks are probably toward the downside for commodity prices over the coming months, but are not anticipating large falls in prices for most commodities.

"Prices for most agricultural products, in particular, are expected to remain relatively robust".

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