July 3, 2013

New Zealand's commodity prices drop 3.7% in June

Following a 1.6% decline in May, New Zealand's ANZ Commodity Price Index fell 3.7% last month with whole milk powder declined by 9% and skim milk powder fell by 8%.

The Thomson Reuters/Jefferies CRB Commodity Index, the world's leading benchmark of commodity prices, fell 1.5% last month and is now sitting near its lowest levels since June last year. Weaker manufacturing activity in China has weighed on prices of raw materials and prices of dairy products have fallen in three of the past four GlobalDairyTrade auctions.

Within the ANZ index, nine commodities fell in June, five rose and three were unchanged. Beef fell 7%, butter declined 4% and cheese was down 2%. Apples, aluminium and lamb fell 1% and pelt prices had a "minor dip".

Wool was the biggest gainer, rising 5%, kiwifruit gained 3% and casein and seafood climbed 2%. Logs rose about 0.3%. Wood pulp, venison and sawn timber were unchanged.

The ANZ NZD Commodity Price Index extended its gains, rising 0.9% in June to a two-year high. It is now 6% below its March 2011 peak. The kiwi dollar was last at US$0.78, having declined from as much as US$0.87 in April.

ANZ's index includes commodities which make up about 60% of New Zealand's US$46 billion annual export earnings. Results of the latest GDT dairy product auction are due Wednesday (Jul 3).