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Seafood leads commodity prices up in June

NZN 5/07/2016 Paul McBeth

New Zealand commodity prices rose for a second month in June, led by more seafood and dairy products, although an appreciating kiwi dollar limited those gains in local currency terms.

The ANZ commodity price index rose 3.7 per cent last month, after a 1.1 per cent increase in May. On an annual basis, prices were down 5.4 per cent.

In New Zealand dollar terms the index rose 0.3 per cent, adding to a 2.5 per cent increase in May, and an annual decline of 5.9 per cent. The trade-weighted index rose 4.9 per cent in June.

"There was broad-based strength across all the major categories. However, producers won't be celebrating too loudly," ANZ Bank New Zealand agri-economist Con Williams said in his report.

"In many cases, world prices are still below the same time last year and the NZD rose over the month too."

New Zealand's biggest commodity export - dairy products - has been hampered by low global prices as European and North American farmers produce more. Prices have recovered somewhat from last year's slump, and NZX futures indicate prices at the upcoming GlobalDairyTrade auction will rise between 3 per cent and 5 per cent.

Tuesday's data show seafood prices led local gains, up 8.2 per cent with a notable increase in the price of hoki and squid. NZX-listed fishing group Sanford has previously said the hoki catch has been lower as it tries to align supply withy demand.

Dairy prices rose 4.8 per cent in June, with cheese prices up 9.2 per cent, skim milk powder gaining 8.4 per cent and whole milk powder increasing 3.7 per cent.

ANZ's Williams said skim milk prices are catching up with those in Europe, while whole milk prices were bolstered by the lower seasonal supply from New Zealand.

Horticulture prices extended their gain, up 4.2 per cent as new season cops reached markets in Europe and Asia, while meat prices increase 2.6 per cent due to a smaller lamb crop. Forestry prices increase 1.7 per cent in June and aluminium prices were up 2.3 per cent in the month.

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