NZ commodity prices rise in June, led by seafood, dairy

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% last month, after a 1.1% increase in May. On an annual basis, prices were down 5.4%. In New Zealand dollar terms the index rose 0.3%, adding to a 2.5% increase in May, and an annual decline of 5.9%. The trade-weighted index rose 4.9% 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 NZ dollar 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 3-5%.

Today's data show seafood prices led local gains, up 8.2% 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 with demand.

Dairy prices rose 4.8% in June, with cheese prices up 9.2%, skim milk powder gaining 8.4% and whole milk powder increasing 3.7%. Mr 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% as new season cops reached markets in Europe and Asia, while meat prices increase 2.6% due to a smaller lamb crop. Forestry prices increase 1.7% in June and aluminium prices were up 2.3% in the month.

(BusinessDesk)

Paul McBeth
Tue, 05 Jul 2016

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NZ commodity prices rise in June, led by seafood, dairy