Data Flash (New Zealand)

ANZ Commodity Price Index June 2000

ANZ Commodity Price Index
::::::::::::::::::::::::: NZD Index:::::::::::::::World
Price Index
:::::::::::::::::::: mom %::::: yoy %::::: mom %::::::::::yoy %
Dec-99::::::::::::::: +2.9:::::::::: +15.0::::::::::+2.3:::::::::: 11.0
Jan-00::::::::::::::: +0.2:::::::::: +15.1::::::::::+1.2:::::::::: +9.3
Feb-00::::::::::::::: +5.2:::::::::: +22.3::::::::::+2.0::::::::::+11.1
Mar-00::::::::::::::: +0.8:::::::::: +22.4::::::::::+0.8::::::::::+13.1
Apr-00::::::::::::::: -4.2:::::::::: +18.2::::::::::-2.8:::::::::: +8.4
May-00::::::::::::::: +4.0:::::::::: +22.2::::::::::+0.0:::::::::: +5.8
Jun-00::::::::::::::: +2.0:::::::::: +21.4::::::::::+1.2:::::::::: +7.9
Source: DB Global Markets Research, ANZ Bank

Key Points

The foreign currency price of New Zealand's commodity exports increased by 1.2% in June. The previously recorded 0.5% rise in May was revised to no change in May.

The overall rise was driven by a sharp increase in milk powder prices. Other significant increases were seen for butter, casein, aluminium, wood pulp and skins. However, a decline in prices was recorded for wool, beef, lamb, sawn timber, kiwifruit and apples.

Relative to June 1999, the foreign currency price of New Zealand's commodity exports increased 7.9%.

In NZD terms, commodity prices recorded a 2.0% increase in June and were up 21.4% on last year. The index now stands at an all time high.

Comments

The latest rise in the commodity prices is consistent with our forecast that average domestic currency export prices will have risen by over 2% qoq in Q2, significantly above RBNZ expectations. ú As the charts below show, the ANZ commodity price index has been a quite a good leading indicator of movements in tradeables inflation. Based on past relationships, a significant pick- up in tradeables inflation can be expected, consistent with our forecast of overall CPI inflation reaching 3.2% yoy by the end of the year.

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