NZ commodity prices slide 2.3% in January, for a 15% annual drop

The ANZ Commodity Price Index fell to 232.4 in January.

New Zealand commodity prices slid 2.3% in January, led by declines in wool, skins, cheese and whole milk powder prices.

The ANZ Commodity Price Index fell to 232.4 in January, from 238.0 in December, for an annual decline of 15%. A fall in the New Zealand dollar limited the drop in the local index to 0.4% for the month, or 1.6% on an annual basis.

"Global commodity prices have started the year on the back foot, driven by falls in oil and industrial metals," ANZ rural economist Con Williams said in his report. "Soft commodity price movements and prices in New Zealand's specific export basket have been more mixed, however, varying with the fundamentals of each sector."

Prices were stable-to-better for nine of the 17 commodities ANZ monitors in January, with eight declining.

The biggest gains were for logs and butter, which both advanced 1.2%; and casein, up 1%. The largest falls were for whole milk powder, which fell 6.7%; skins down 3.6%; cheese which slid 2.6%; and wool which declined 2.5%.

Chinese economic fortunes and supply dynamics continue to influence many commodities, Mr Williams said.

Still, declines in world prices were mostly offset by a fall in the New Zealand dollar against the US dollar, which showed the currency has been largely doing its job, he said.