Commodity prices surge 7.4% in third highest rise since 1986
The drought drives up the price of whole milk powder by almost a quarter.
New Zealand commodity prices surged 7.4 percent in March, the third-biggest gain since at least 1986, as drought drove up the price of whole milk powder by almost a quarter.
The kiwi dollar price rose even more as the currency gained.
The ANZ Commodity Price Index rose 7.4 percent last month to be within 6 percent of the all-time record set in April 2011. Ten of the 17 commodities in the index rose in March, five were unchanged and two fell.
Last month Fonterra lifted its forecast payout to farmers to $5.80 per kilogram of milk solids from an earlier forecast of $5.50 after prices on the GlobalDairyTrade platform rose 27 percent since February.
The worst drought in the North Island in almost seven decades prompted the company to trim its forecast annual milk volume, which will match last season's compared to an earlier forecast 1 percent gain.
Whole milk powder prices climbed 23 percent last month, the price index showed, prices for pelts gained 16 percent, butter rose 15 percent and skim milk powder was up 11 percent.
Cheese was up 5 percent, wool rose 3 percent, logs gained 2 percent, and lumber, casein and beef all rose 1 percent.
Prices of seafood, wood pulp, kiwifruit, apples and venison were unchanged in March, while aluminium fell 7 percent and lamb dropped 1 percent.
The gains were not lost on New Zealand producers. The ANZ NZD Commodity Price Index rose 8.7 percent as the kiwi fell against the US and Australian dollars, nudging the trade-weighted index lower.
The latest GlobalDairyTrade auction is held tonight.
(BusinessDesk)
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Commodity prices surge 7.4% in third highest rise since 1986
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