NZ commodity prices rise 3.5 percent in September, led by milk, aluminium

Tuesday 2nd October 2012

New Zealand commodity prices rose for a second month in September, in the strongest monthly gain in a year-and-a-half, led by skim milk powder and aluminium.

The ANZ commodity price index rose 3.5 percent last month, about 14 percent weaker than the same month a year ago. Excluding dairy prices the index rose 0.5 percent.

The largest increase was shared by skim milk powder and aluminium, both up 11 percent, followed by butter and whole milk powder up 8 percent, wool and apple prices gaining 6 percent, cheese climbing 5 percent, venison up 2 percent and logs and beef rising 0.5 percent.

The price of pelts bucked the trend falling 10 percent, with casein and kiwifruit prices down 2 percent. Lamb prices eased 1 percent.

In New Zealand dollar terms, the commodity price index rose for the first month in nine, up 3 percent.

The strong kiwi dollar has damped the potential returns for local exporters, recently trading near its recent six month high of 82.81 US cents.

Last week, Fonterra Cooperative Group, the world's largest exporter of dairy products, missed its forecast with a 19 percent drop to $6.40 in its 2012 payout to farmers, reflecting lower prices for milk and a stronger kiwi dollar, and in spite of record production.

The survey comes ahead of Fonterra's fortnightly GlobalDairyTrade auction on Tuesday in the US. Dairy prices rose 6 percent to the highest level since early April at the last auction in their third straight gain, with increases for all eight products on offer.

BusinessDesk.co.nz

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