Thursday 12 January 2017 01:20 PM
NZ commodity prices rise for eighth month, buoyed by dairy recovery
By Rebecca Howard
Jan. 12 (BusinessDesk) – New Zealand commodity prices rose in December, the eighth consecutive monthly gain, as dairy prices continued to improve.
The ANZ Commodity Price Index advanced 0.7 percent in December to 277.3 and was up 16.5 percent on an annual basis. In New Zealand dollar terms the index increased 2 percent in the month and rose 9.4 percent on an annual basis as the kiwi eased against the greenback and the British pound.
Dairy was the standout performer as tight global milk supplies and improved Chinese import demand continued to be the main drivers, said ANZ agri economist Con Williams. All dairy-based products improved in December, led by butter, up 6.2 percent and whole milk powder, up 4.8 percent. Dairy prices are now 44 percent higher than they were a year earlier.
Non-dairy commodity prices, however, “were the disappointment,” down 1.9 percent month-on-month, said Williams. The falls were mainly centred in the meat and fibre group, with wool falling 6.2 percent on the month on a lack of interest from China, which accounted for 50 percent of exports in the prior season. Beef prices fell 5.5 percent as higher US supply weighed on import prices and “some trader nervousness over holiday sales,” said Williams. Lamb prices were down 2.4 percent month-on-month, the first and only fall in 2016.
Forestry prices continued to fare well, up 0.6 percent on the month as log prices continue to find support from China and local construction activity.
Elsewhere, moves were small with seafood up 0.2 percent on the month and aluminium prices down 0.6 percent.
Horticulture finished the year 8 percent higher and remains well positioned for another profitable 2017 harvest, said Williams.