NZD: Commodity Price Index lifted 2.7% m/m in November - ANZ

The ANZ Commodity Price Index rose 2.7% in November, the seventh rise in as many months as the recent run of form has seen the index lift to 13% higher than a year ago (due in part to base effects) while the NZD Commodity Price Index also lifted 2.7% m/m in November, to deliver the first annual gain for exporters this year, notes Con Williams, Agri Economist at ANZ.

Key Quotes

“In terms of sector specifics:

• Dairy prices rose 4.8% m/m in November, the sixth rise in a row. Tight global milk supplies and Chinese import demand continued this month. Whole milk powder rose 11% m/m (31% y/y), butter 3.1% and skim milk 0.8%. The index uses USDA prices, where price gains were smaller than those registered on the GlobalDairyTrade platform (i.e. WMP +24% in November). Cheese prices (-7.9% m/m) gave up some of the gains achieved over the second half of the year, due to increased Northern Hemisphere inventory levels and increased export competition, especially from the US.
• Prices for aluminium rose 4.2% m/m and are now 18% higher than a year ago. General metal prices have been on the improve from early in the year as inefficient capacity has been shut down in China and a general lift in import demand has been seen. Metal prices received a further shot in the arm in November as investors took the view Donald Trump’s infrastructure program will lead to a further boost in demand. 
• Seafood products rose 2.3% m/m and are now 13% higher than last year. Dory and salmon prices drove the increase in November.
• The meat and fibre group rose modestly in November, up 0.6% m/m with mixed price signals.
• Horticulture prices lifted slightly (+1.9% m/m), but the bulk of the 2016 crops has been sold already.
• Forestry prices were fairly steady (+0.4% m/m). Both key international and domestic forestry price benchmarks have continued to trend up in recent months. Chinese demand remains firm and local demand strong due to the booming local construction sector.”