Commodity prices drop 1% in June as whole milk powder and beef

New Zealand commodity prices fell in June, weighed by prices for whole milk powder and beef, but if New Zealand's terms of trade in goods have recently disappeared, they remain high by historical standards. The ANZ Commodity Price Index fell 1 percent in June and is up 2.2 percent from the previous year. In New Zealand dollars, the index fell 1.1% in June, but was up 7.4% from the previous year.

According to ANZ, the New Zealand dollar has had a "twisting" month. trading partners except the US dollar.

Prices for dairy products fell 1 per cent in June, as whole milk prices fell 1.1 per cent in the month. Skimmed milk powder was the only dairy component to show an increase, up 2.4% over the month.

According to ANZ, however, dairy prices remain broadly high, supported by solid world demand, particularly from China and the recent slowdown in world output growth

Meat and fiber prices have falling 0.8 per cent, as beef prices fell 2.8 per cent thanks to a strong global and New Zealand supply. The slaughter due to Mycoplasma bovis provides an additional boost to the supply. Lamb prices however rose by 1.1 percent, reflecting strong demand from China and Europe. Prices for horticultural products continued to recover, up 0.6% for the month.

Prices for horticultural products fell by 3.5%, but were mixed, a 4.2% drop in apples partially offsetting a 7% drop in kiwifruit prices From June, ANZ said:

Aluminum prices fell 2.7% over the month but remain up 19.3% over the year. They are expected to rebound to a high level because of US sanctions against Russia, persistent trade tensions and China's crackdown on excess production and environmental restrictions

. global inflationary pressures) should limit any significant rise in the terms of trade here, but the recent performance of export prices should keep it at a high level. "