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NZ commodity prices edge up in March

NZN 5/04/2017 Paul McBeth

New Zealand commodity prices edged higher in March as wool prices bounced from a slump and red meat continued to attract buyers.

The ANZ Commodity Price Index rose 0.4 per cent in March to 283.5 and was up 3.4 per cent in local dollar terms to 209.4 in a month when the kiwi depreciated against its major trading partners.

Wool prices were the biggest gainer in the month, up 8.6 per cent, which ANZ Bank New Zealand agri economist Con Williams said was due to bargain hunters chasing cheap product and as supply was held back with auction prices below the cost of production.

Lamb prices rose 5.8 per cent and beef prices increased 1.9 per cent, although skin prices fell 1.8 per cent.

Aluminium prices also gained in the month, up 2.7 per cent, bolstered by a reduction in inefficient Chinese capacity and growing optimism about global demand

Forestry prices increased 1.2 per cent as Chinese demand bolstered log and wood pulp export prices.

Dairy prices fell 1.8 per cent in the month, but were still nearly 48 per cent higher than a year earlier, as whole and skim milk powder prices fell on the increased New Zealand supply.

Prices at Wednesday's GlobalDairyTrade auction rose 1.6 per cent, with enough demand to soak up the increased production from New Zealand farmers.

The recovery in dairy prices has underpinned the annual gain in the commodity price basket, with the index up 23 per cent and 17 per cent in New Zealand dollar terms.

Horticulture prices were unchanged in March, although ANZ's Mr Williams said early-season indicators were good for kiwifruit and pipfruit.

Seafood prices underperformed in March, falling 3.4 per cent, almost entirely due to a slump in rock lobster prices as demand tapers off from Chinese New Year.

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