NZ commodity prices fall for fifth month in August, led by decline in dairy

Wednesday 2nd September 2015

New Zealand commodity prices fell for a fifth straight month in August, led by a decline in dairy prices to their lowest level in 11 years.

The ANZ Commodity Price Index slid 5.2 percent in August, following a 5.5 percent decline in July. The index is 23.5 percent below year earlier levels.

The drop was led by a slump in dairy prices, which fell 10.1 percent from July. Skim milk powder fell 16 percent while whole milk powder dropped 11.2 percent and international prices for butter, cheese and casein also declined.

However, dairy product prices rose 10.9 percent in the GlobalDairyTrade auction overnight, taking the gain over the last two events to 23 percent after nearly six months of declines.

ANZ chief economist Cameron Bagrie said the recent lifts in dairy auction prices "suggest the worst may be behind us".

Meanwhile, prices also fell across other commodities in August. Forestry prices slid 6.1 percent, led by a 10.4 percent fall in log prices reflecting weaker demand from China and the wider Asian region. Timber and pulp prices were flat.

Horticulture prices fell 1.6 percent as both kiwifruit and apple prices declined. Aluminium prices dropped 5.6 percent, and are 22.9 percent lower than the year earlier. Prices in the seafood sector were unchanged.

Meat prices bucked the trend, increasing 1.6 percent as a 6.6 percent gain in beef prices and a 1.4 percent lift in wool prices offset a 2.2 percent decline in lamb prices and a 2.3 percent fall in skins.

The NZD index fell 3.9 percent in August to the lowest level since February 2013. While declines in the New Zealand dollar against the greenback, the yen and the euro over August helped to partly counter the fall in world commodity prices, further declines are likely to be required to support New Zealand dollar returns in the future, ANZ said.

BusinessDesk.co.nz

Comments from our readers

No comments yet