World commodity prices fell slightly during June but prices in New Zealand dollars rose because of the depreciation of the NZ dollar against the currencies of our trading partners.
The ANZ world commodities price index covering our major exports fell 0.4% in June, the third small monthly fall since its all-time peak reached in March.
The world index is down 6.5% since March. But because of the steady weakening in strength of the NZD, the ANZ NZ commodities price index has gained slightly during June, up 0.7%, and has set a new all-time record.
For example, the NZD was worth US65.6c at the beginning of June and US62.2 at the end of the month.
A US1c downward movement adds 10c/kg to the milk price.
The foreign exchange effects are also shown in the world index being 4.8% higher in June than 12 months before, while the NZ index is 14.5% higher.
The index weightings are dairy 41%, beef, lamb and logs all 11% each, kiwifruit 8%, seafood and aluminium both 4%, sawn timber 3%, apples 2%, wood pulp 2% and wool and skins 1% each.
Dairy prices rose 1.7% in June compared with May, firmer prices for milk powders being offset by weakness in butter and cheese.
The meat and fibre index fell 3% in June due to disrupted demand in China from covid lockdowns.
“Lamb prices have been more stable, but NZ supply remains curtailed as labour shortages continue to limit processing capacity,” said ANZ agricultural economist Susan Kilsby.
The horticulture index was up 4.8% in June in world currency terms, both kiwifruit and apples getting price lifts.
The forestry index was down 3% as log prices eased due to lockdowns in China.
Aluminium prices fell 9% as demand weakened due to slower economic activity.
Kilsby said global shipping prices eased during the month, the Baltic Dry Index falling 15%.
“Despite the overall improvements, many NZ exporters continue to report challenges in
moving goods to market in a timely manner,” she said.
“Shipping costs are expected to remain elevated until supply chains start to consistently
function in a more efficient manner.”
