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NZ commodity prices flatline in September

Thursday 3rd October 2019

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An index of New Zealand commodity prices was unchanged in September as gains in meat, forestry and aluminium offset weaker prices in other sectors.

The ANZ world commodity price index was flat in September after eking out a 0.3 percent gain in August. It was 3.4 percent higher than it was a year earlier. In local currency terms, the September index rose 1.4 percent and was up 6.5 percent on the year.

Dairy prices eased 0.5 percent in September but ANZ agriculture economist Susan Kilsby said prices are expected to firm in the coming months as global prices are supported by low growth in global milk supplies.

The meat and fibre index lifted 1.6 percent in September, continuing its upward momentum. Lamb prices lifted 2.4 percent versus the prior month while beef prices were up 1.5 percent. Supply is low at this time of the season but both international prices and the prices farmers are receiving for stock are at, or near, record levels, said Kilsby.

Last month, Stats NZ noted that the expanding African swine fever outbreak in Asia had cut pork supplies and was also increasing demand for other meat. 

ANZ's horticulture index fell 2.6 percent in September and is down 7 percent from a year ago. Kiwifruit prices firmed again while apple prices fell considerably, Kilbsy said.

Forestry prices lifted 0.3 percent versus August as they continue to gradually recover from a sharp correction earlier this year. Prices, however, remain 12 percent weaker than a year earlier. At present, the domestic market is supporting prices for the higher-quality logs that can be milled for use in construction, Kilsby said. Supply of timber continues to slow as some owners of small woodlots elect to delay harvest.

Aluminium prices lifted 0.7 percent in September. Price movements have oscillated from month to month but the price of this commodity has generally been tracking down. Global demand for aluminium is falling as manufacturing activity decreases. Most of the aluminium produced in New Zealand heads to Japan; prices are expected to ease but New Zealand producers should still maintain premium prices versus market, she said.


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