NZ commodity prices drop 4.7%
Sinking dairy and meat prices affect index.
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New Zealand commodity prices fell for a second month in May on continued weakness in dairy products and a decline in meat prices.
The ANZ Commodity Price Index dropped by 4.7%, following April's 7.4% decline. The index is now about 18% lower than in May last year.
The commodity data comes after dairy product prices fell to the lowest level in almost six years during the GlobalDairyTrade auction overnight, amid concerns about the end of milk quotas in Europe, Russia's trade embargo and sluggish Chinese demand.
Fonterra has lowered its farmgate milk payout for 2014/2015 by 10 cents per kilogram of milk solids to the lowest level in eight years.
In the ANZ series, dairy prices fell 8.2% in May and were down 36% from the same month last year. Skim milk powder dropped 13.2% and whole milk powder fell 10%.
ANZ New Zealand agri economist Con Williams says end of season New Zealand supply has been higher than expected after improved autumn conditions, especially in the North Island. Prices were also hurt by "lacklustre China demand and increased competition from European skim milk powder," he says.
Meat prices fell 2.9% in the latest month, led by a 5.7% drop in beef prices. Lamb fell 4.2%. The horticulture sub-group gained 1.5% and aluminium rose 0.6%.
Forestry prices declined 0.6% on weak prices for logs, while wood pulp and timber were little changed. Seafood rose 0.2%.
The NZD index declined 2.7% and was down 7.9% from a year earlier, reflecting the weaker kiwi dollar. The index is now at its lowest level in more than two years.
(BusinessDesk)
Jonathan Underhill
Wed, 03 Jun 2015
Wed, 03 Jun 2015
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NZ commodity prices drop 4.7%
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