NZ commodity prices drop in January
Wool prices dropped 8.6% month-on-month and are now 30% weaker compared to a year ago
New Zealand commodity prices dipped in January, with wool and dairy weakness counteracting broad-based gains.
The ANZ Commodity Price Index fell 0.1% in January to 276.8 and was up 19.1% on an annual basis. In New Zealand dollar terms the index fell 1.1% in the month and rose 8.6% on an annual basis as the kiwi lifted against most major trading currencies apart from the Australian dollar. On an annual basis, the dollar is up 8.2% against the US dollar, 11% against the euro and 27% against the British pound, putting a strain on export returns particularly in the meat sector.
Wool prices dropped 8.6% month-on-month and are now 30% weaker compared to a year ago. Prices have dropped more than 5% every month since September 2016, mainly due to lack of interest from China, said ANZ agri economist Con Williams.
Dairy prices dropped 0.4% in January, due to cheaper whole milk powder, which fell 2.3% in the month. Other dairy products improved in January, with skim milk powder up 1.6%, butter gaining 1% and cheese advancing 0.8%. Dairy prices are up 38% on the year, with whole milk powder gaining 55% since June, driven by tight global milk supplies and improved Chinese demand.
Non-dairy commodity prices gained 0.7% in the month. The ex-dairy index rose 7.4% over the year, with major non-dairy groups improving. Beef and lamb prices rose 1.9% and 1.6% respectively, with good demand from China and the Middle East for the latter, though gains are limited by the strength of the dollar against the US dollar and European currencies.
Seafood prices rose 0.9% for the month and 14% in the year, while forestry rose 0.5% and aluminium gained 3.2% in January. Log prices have found support from Chinese demand and construction activity, and wood pulp prices gained 1.4% with surplus inventories "snapped up by strong Chinese demand," Williams said.
(BusinessDesk)
Sophie Boot
Fri, 03 Feb 2017
Fri, 03 Feb 2017
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NZ commodity prices drop in January
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