Commodity prices down for second month

Monday 2nd August 2010

New Zealand commodity prices fell for a second month after a weak result in Fonterra’s online auction in July saw a slump in dairy prices drag down the ANZ Commodity Price Index.

The survey fell 0.8% to 270.0 last month, following a revised 1.6% decline in June. Dairy prices led the fall, with the price for whole milk powder down 12.6% and skim milk powder falling 2.7%, extending the 3.1% and 8.1% declines last month.

The weaker dairy prices came in a month when Fonterra Cooperative Group’s globalDairyTrade reported a 15% slump in whole milk powder to US$3,224 a tonne.

In New Zealand dollar terms, the index fell 2.8% to 205.2, following a revised 0.4% decline in June.

Fonterra’s online auction on Tuesday in the US may take its lead from the weaker figure, with economists predicting more softness in the globalDairyTrade result.

Though the headline number declined, with six commodity prices falling in July, the index was still up 47% on an annual basis, and nine locally produced raw materials increased in price.

The price of skins jumped 10.1% in July, leading gainers, with seafood rising 5% and kiwifruit climbing 4.8%. Wool, casein and aluminium prices all increased between by between 3% and 4%, while the prices of venison, apples and lamb edged up at a pace below 1%.

Other decliners were beef and sawn timber, which fell a respective 3.4% and 2.8%, and butter and log prices, which dropped 1.4% and 0.9% respectively.

Businesswire.co.nz

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