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Commodity prices rise for third month

NZ Newswire logoNZ Newswire 3/08/2016 Jonathan Underhill

New Zealand commodity prices rose for a third straight month in July, led by dairy products, aluminium and meat, although the strong kiwi dollar limited the benefits for local producers.

The ANZ commodity price index rose 2 per cent last month, bringing its three-month gain to 6.9 per cent. In New Zealand dollar terms, prices have gained just 2.5 per cent in the past three months and are 5.7 per cent lower than in the same period last year.

The release of the commodity price index follows the results of the latest GlobalDairyTrade auction, which showed the GDT price index jumped 6.6 per cent to US$2,436, while the price of whole milk powder, the biggest product New Zealand sells by volume, rallied 9.9 per cent to US$2,265 a tonne. Dairy rose 4.1 per cent month on month in the ANZ index, with casein up 7.8 per cent, butter gaining 5.2 per cent and milk powder up 4.1 per cent.

Meat rose 2 per cent in the latest month, led by a 4.4 per cent increase in lamb prices and a 2.1 per cent gain for beef. Aluminium rose 2.2 per cent.

"World sheepmeat prices have primarily improved because of a significant drop-off in New Zealand supply," said Con Williams, agri economist at ANZ New Zealand.

"This is due to a smaller lamb crop in 2015, some re-stocking and high early season turn-off." Beef prices were helped by lower seasonal supply within the US, he said.

Seafood prices were largely unchanged, forestry prices fell 1 per cent and horticulture declined 1.4 per cent.

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