NZ commodity prices hit new record in sixth straight gain

NZ commodity prices hit new record in sixth straight monthly gain

By Paul McBeth

March 1 (BusinessDesk) – Prices for New Zealand-produced raw materials extended their gains for a sixth month, hitting a new record, according to the ANZ Commodity Price Index.

The index climbed 2.7% to 321.8 last month, and surged 21% in the past six months, as the price of 13 raw materials increased. Skins led gainers, rising 13%, while milk powder, sawn timber and venison gained 5%. Aluminium and bitter prices rose 3%, while wool, casein, cheese, wood pulp and seafood prices rose 1% or less.

“It is simply a question of time before the income boost from higher commodity prices diffuses into the broader economy,” said ANZ New Zealand economy Steve Edwards in his report. “Recent seismic events reinforce the importance of strong commodity prices as a crutch of support to the economy.”

Dairy prices have underpinned the gains in New Zealand’s commodity prices, with exporter Fonterra Cooperative Group hiking its forecast payout to farmers by 60 cents a kilogram to as much as $8/kg.

Last month, beef and log prices each fell 1%, while prices for kiwifruit and apples were unchanged. The New Zealand index rose 2.9% to a record 229.7.

Finance Minister Bill English today told a media briefing in Wellington the strong agriculture sector has helped rebalance a flat economy in the face of muted consumer spending. The government’s plans have been jolted by last week’s fatal earthquake in Christchurch, though English says it will continue with its general direction.

“We are confident that the direction for the economy is the right one, that high prices for our food products; increases in household savings which are going on right now; improvements in the effectiveness of government expenditure; a more competitive economy are the right recipe for the long term,” he said.

(BusinessDesk)

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