Falling dairy prices drag commodity index down

Thursday 1st July 2010

New Zealand commodity prices fell for the first time in 15 months as the ANZ Commodity Price Index eased from a record high in May, reflecting softer prices for dairy products.

The index fell 1.2% to 280.9 last month, following a revised 2.8% gain in May. Dairy prices sank 3.1%, with dairy index skim milk prices tumbling 8.1% in a month when Fonterra Cooperative Group's online trading platform, globalDairyTrade, reported a decline in the average price for whole milk powder and increased volatility.

In New Zealand dollar terms, the index slipped 0.2% to 217.2 as the kiwi dollar pared its gains last month.

ANZ economist Steve Edwards said the index was still at the "second highest level measured behind last month's peak" and was up a "solid" 53% from the same month a year ago.

Eight of 13 commodities fell, including aluminium, which dropped 6%, apples were down 5.8%, while beef fell 5.2%. Log prices slipped 2.3%, sawn timber eased 1.7% and kiwifruit declined 1.2%.

Among the gainers, skin prices rose 6.8%, wood pulp prices increased 4.5% and seafood prices advanced 3.2%. Wool edged up 1.5% and venison was up 1.3%.

Businesswire.co.nz

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