The ASB Commodities Index in United States dollar terms has fallen to its lowest level in three and a half years, dragged down by the latest drop in world dairy prices.
The recent fall in the value of the New Zealand dollar to US59c has only partially cushioned the decline in commodity prices, as the index in NZD is now the lowest in two and a half years.
ASB reports the dairy index fell 6.5% after the latest Global Dairy Trade auction, and that component help pull the USD Index down 3.5%.
The indexes for sheep, beef, forestry and fruit fell about 1% each.
“Last week’s dip in dairy prices might have been the most dramatic illustration of softer demand for NZ’s key export commodities, but prices remain weak across the board,” ASB economist Nat Keall said.
“The common theme remains the soft Chinese outlook.
“Chinese consumer confidence is still very weak, with no major stimulus measures yet to be unveiled.
“This remains a major headwind for NZ’s exports and broader commodity prices more generally.”