NZ commodity prices rise in March on dairy, meat and forestry gains; aluminium prices hit by trade war
By Paul McBeth
April 5 (BusinessDesk) - New Zealand commodity prices rose for a third month in March as tight supply bolstered prices
for dairy and meat products and Chinese demand continued to underpin forestry. Aluminium prices fell as the US imposed
tariffs, stoking trade tensions with China.
The ANZ commodity price index increased 1.2 percent in March and is up 5.8 percent from a year earlier as the country's
dominant raw material exports were supported by supply concerns and strong Chinese demand. In New Zealand dollar terms,
the index gained 2 percent in March for an annual increase of 5 percent.
"There was broadband support drive by dairy, meat and fibre, and forestry," ANZ Bank New Zealand agri economist Con
Williams said in a note. "The laggard was aluminium, which has been caught up in the US-China trade tensions alongside
increasing inventory levels."
New Zealand's terms of trade reached a new high in the December quarter as meat export values and volumes were boosted
by record lamb sales, adding to the last year's recovery in global dairy prices. At the time, ASB Bank economists
anticipated the terms of trade will stay strong this year as improving global growth stokes demand for local products.
Since then, trade tensions between the US and China have been escalating with the world's two biggest economies imposing
tit-for-tat tariffs. That included new US tariffs on steel and aluminium imports, with Chinese production of those
metals attracting accusations of undercutting rivals and dumping goods in foreign markets for several years.
The ANZ report shows aluminium prices fell 5.1 percent in March, and Wiliams said there's more uncertainty "given
China's clampdown on excess production and capacity restrictions to improve air quality".
Dairy prices rose 3 percent in March as a resumption of Chinese demand after the Lunar New Year coincided with supply
concerns. Whole milk powder prices rose 4.4 percent and butter was up 5.5 percent, while skim milk powder dropped 3.8
percent.
Meat and fibre prices increased 0.3 percent as beef markets were bolstered by tight Australasian supply, while Chinese
demand drove a recovery in wool prices from recent lows, rising 0.6 percent.
Forestry prices edged up 0.3 percent, their 18th straight gain as domestic and Chinese demand for wood products
persists. Seafood and horticulture prices were largely unchanged.
(BusinessDesk)
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