Lower kiwi dollar offsets fifth fall for commodities
Post on: 2011-11-02 By: admin
Export commodity prices fell for the fifth month in a row in October, though a weaker dollar offset most of the decline.
ANZ's commodity price index fell 3.5 per cent, the largest monthly decline since the depths of the recession in February 2009.
The index peaked last May and has fallen 7.9 per cent since then.
A weaker exchange rate absorbed most of last month's decline. In New Zealand dollar terms the ANZ index fell 0.6 per cent. It peaked last March and has fallen 11.7 per cent since then.
"The latest easing takes both the world and the NZ dollar priced indices back to the levels that prevailed at the start of the year, but encouragingly the indices remain significantly above their historical averages," ANZ economist Steve Edwards said.
"From here, it all hinges on the global environment really. It could go lower. But in saying that, the last [Fonterra] dairy price auction was a little firmer." Dairy products make up 42 per cent of the index.
Last month cheese prices fell 7 per cent, skim milk powder and butter 6 per cent, whole milk powder 4 per cent and casein 1 per cent.
The dairy sub-index is down 15.2 per cent from its most recent peak last March, and down 20.4 per cent in New Zealand dollar terms.
Kiwifruit prices fell 17 per cent. "This is consistent with the traditional season pattern as the export season winds down," Edwards said.
Other large falls in the basket were aluminium and beef, which eased 5 and 4 per cent, respectively. Lamb and sawn timber both dropped 1 per cent.
But skin prices rose 3 per cent and wool 1 per cent.
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