Commodity prices rally more than expected

Tuesday 4th August 2009

Aluminium posted the biggest gains among New Zealand commodity prices in July, followed by wood pulp, lumber and logs, according to the ANZ Commodity Price Index.

The index rose 1% last month, the fifth straight increase, bringing the gain since February to 7.8%. The NZ Dollar Commodity Price Index edged up just 0.1%, reflecting the kiwi’s gains against the currencies of most trading partners.

Aluminium gained 6.7% from June, while wood pulp rose 3.4%, lumber climbed 2.5% and logs rose 2.1%. Beef prices rose 1.4%, wool gained 0.8% and dairy prices rose 0.6%.

The advance reflects a global rally in commodity prices as better-than-expected economic data and rising stock markets stoke optimism the world will climb out of its slump, reviving demand for raw materials.

The Reuters/Jefferies-CRB Index of 19 raw materials climbed 3.4% to 266.28 yesterday in New York.Seafood prices posted the biggest decline in July, falling 2.2%, the ninth successive monthly decline to a two-year low.

The share price of listed fishing company Sanford has declined about 8% in the past two months, while the NZX 50 climbed by about the same amount. The shares climbed 33% last year, making Sanford a standout on the benchmark index.

A weakening kiwi dollar, which fell from a record high above 81 U.S. cents in February 2008, to about 52 cents in December, helped stoke returns from strong global prices for seafood last year.

Kiwifruit prices fell 1.6% last month and apples declined 0.4%. Prices of lamb fell 1.4% and skins dropped 0.4%. Venison rose 0.3%.

Businesswire.co.nz

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