ASB economists have reweighted their commodities index to reflect changes in the composition of our exports.
The weighting of wool has gone down and that of fruit, mainly kiwifruit and apples, has gone up.
In the weightings wool has reduced from 2.35% to 1.47%, which is a very low percentage for what was historically one of New Zealand’s biggest export earners.
Over the past decade the value of wool exports have been cut in half, from approximately $900 million annually to $450m.
In contrast, beef and lamb weightings have risen slightly, to now be 11% and 10% respectively in the makeup of the whole NZ commodities index.
Fruit has been the biggest mover, going up 1.5% to now be 9% of the index.
That is split into 6.7% for kiwifruit and 2.4% for apples.
“Fruit is the major gainer in our re-weighting, and we expect that to continue.”
“Fruit is the major gainer in our reweighting, and we expect that to continue,” rural economist Nat Keall said.
Dairy lost about 0.5% but it still makes up 43% of the total index, followed by forestry at 18%.
The ASB research team also rebased the year of the index from 2017 to 2019.
“The move to 2019 ensures we have a more recent base year, and the average prices during that year are the closest of any year to the five-year average.
“Our periodic re-basing exercises ensure that the composition of the index remains relevant and accurately reflects the mix of NZ commodity exports.”
During the week ended May 13 the commodities index fell by 1.2% in United States dollar terms.
This was more than offset by a fall in the NZD/USD cross rate of 2.7% which means the index rose 1.6% in NZD terms.
The NZD index is 17% higher than it was a year ago, dairy being a big component, up 10%.
