NZ commodity prices hit new high in November
Dec. 1 (BusinessDesk) – New Zealand’s commodity prices climbed to a new high as 10 of the 15 measured raw materials in the ANZ Commodity Price Index gained in November, led by a surge in the price of pelts and skins.
The index rose 4.5% to 296.2 as the world price for pelts climbed 32% last month to a 13-year high.
The so-called soft commodities have been enjoying a renaissance this year. Dairy prices also extended their gains, up 1% in November from a trough last year, while wool prices added a further 3% to October’s 21-year high.
The value of raw hides, skins and leather exports climbed 54% to $31 million in October from a year earlier, and were up 9.8% to $422 million on an annual basis.
Rising commodity prices are underpinning New Zealand’s weak economic recovery, with the rebound in the dairy sector leading the charge from its trough in July last year.
Reserve Bank Governor Alan Bollard expects farmers will help drive consumer spending over the next couple of years once they’ve repaid outstanding debts and can take advantage of the high prices.
In New Zealand dollar terms the index rose 1.4% to 209, just below its peak in May.
Other raw materials to appreciate last month were logs, and lamb, both up 6%, beef and wood pulp, up 1%, and seafood prices, which increased 0.4%. Kiwifruit, casein and venison were unchanged, while aluminium and skim milk powder prices fell 1% and 3% respectively.
Fonterra Cooperative Group’s online milk powder auction takes place on Wednesday in the U.S., and prices are expected to slowly come off earlier highs.