By Phil Boeyen, ShareChat Business News Editor
Tuesday 2nd October 2001
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The ANZ (NZSE: ANZ) Commodity Price Index rose 1.1% in September the bank reports, just below its peak reached in May.
"This month's result demonstrates that supply side factors continue to provide support for a number of commodities, something ANZ has highlighted since early in the year," says ANZ chief economist David Drage.
"Nevertheless, New Zealand's commodity exports are not totally insulated from world events and the impacts of the global slowdown in demand are being felt in many areas."
Mr Drage says tight market supply conditions continue to underpin world prices for many of New Zealand's key export commodities, providing something of a cushion against the global economic slowdown.
"We have been pleasantly surprised by the continued resilience that commodity prices have shown in recent months".
"Supply factors include both global production and market access issues. The timing of the US beef cycle and declining sheep numbers internationally are examples where lower production will lend support to prices."
The Kiwi dollar is also being credited with keeping export returns up.
"Just as it seemed a rising Kiwi dollar would start to erode returns to New Zealand exporters, the exchange rate has largely retraced earlier gains against the major currencies to provide a further boost to $NZ returns," says Mr Drage.
ANZ says the combination of a low dollar and strong offshore commodity prices is encouraging for the agricultural sector as it moves into the new season although the dry conditions in some parts of the country is a concern.
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