The New Zealand Herald
Goods price index hits record high
ANZ’s World Commodity Price Index — which measures prices received for New Zealand’s main exports — was “sky high” in March, rising 6.1 per cent to its highest point since the index began in 1986.
In local currency terms the index gained 7.4 per cent, month-on-month, to also reach a record high, supported by a 0.4 per cent reduction in the New Zealand dollar Trade Weighted Index, ANZ said.
The gain was mostly driven by high dairy prices.
“Dairy prices [are being] supported by strong global demand, combined with a steady milk supply in the main dairy-exporting nations,” ANZ’s agri economist Susan Kilsby said.
“Global shipping costs continue to trend higher, meaning a smaller portion of the overseas returns is making it [to] producers,” she said.
The Baltic Dry shipping index — a lead indicator of economic activity — shot up by 25 per cent in March.
New Zealand exporters finding it increasingly difficult to source containers and secure space on ships, Kilsby said.
Dairy prices lifted 12.7 per cent in March — their highest level in seven years. Whole milk powder is now 43 per cent higher than a year ago and strong gains were also recorded for skim milk powder and butter.
Whole milk powder prices, which have the greatest impact on Fonterra’s farmgate milk price, remained elevated at yesterday’s Global Dairy Trade auction, trading at an average US$4085 a tonne.
ANZ’s meat and fibre index lifted 1.1 per cent in March and is now 5.9 per cent higher than a year ago.
Wool prices lifted sharply in March, gaining 9.9 per cent but Kilsby said shearing costs are still considerably higher than the value received for the wool shorn on many farms.
ANZ’s horticulture index was unchanged, as prices for new season produce are yet to flow through.
The forestry index gained 1.9 per cent in March. Log prices are now the highest since May 2014.