Six month rally for commodity prices
The ANZ commodity price 4% higher than the same time last year.
New Zealand commodity prices rose for a sixth consecutive month in October, led by butter, lamb and aluminium, although the strong kiwi dollar limited the benefits for local producers.
The ANZ commodity price index rose 0.7% last month and is 4% higher than the same time last year.
In dollar terms, prices are 5.3% lower than in the same period last year, which ANZ New Zealand agri economist Con Williams says is due to the trade-weighted index being 7% higher year-on-year.
The release of the commodity price index follows the results of the latest GlobalDairyTrade auction, which showed the GDT price index jumped 11.4% to US$3327, while the price of whole milk powder, the biggest product New Zealand sells by volume, soared 19.8% to US$3317 a tonne.
Dairy rose 1.5% month-on-month in the ANZ index, with butter up 6.5% and cheese gaining 4.2%.
"Demand for New Zealand-sourced milkfat products has been robust lately and competitor product continues to be soaked up by their own domestic markets," Mr Williams says. "Milk powder prices consolidated in October following large gains since mid-year."
Lamb gained 5.5%, driven by tight local supply and improved Chinese demand, while wool fell 6.8% due to reduced Chinese buying. Beef dropped 5.1% in the month after a lift in US domestic supply, uncertainty over Brazil's market access, and competition from pork and poultry.
The weak British pound continued to weigh on overall dollar returns, which dropped 4% for the month and are down 8.8% in the year.
(BusinessDesk)
Sophie Boot
Thu, 03 Nov 2016
Thu, 03 Nov 2016
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Six month rally for commodity prices
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