New Zealand commodity prices lifted in March, continuing a positive trend that started in January, ANZ Bank’s monthly commodity price index shows.
The world commodity price index rose a monthly 1.4 percent in March but was down 2.1 percent from a year earlier. In local currency terms, the index also rose 1.4 percent on the month and 2.5 percent on the year.
“Firmer prices were recorded in the agriculture and forestry sectors but dairy once again provided the largest price lift,” said ANZ agriculture economist Susan Kilsby.
Dairy prices gained 2.5 percent on the month and are expected to keep rising in the coming months as the market is supported by slower growth in global milk production, she said.
The meat and fibre index lifted 1.1 percent on the month in March. International prices for lamb softened 0.5 percent but are still 4.8 percent higher than a year earlier. Wool prices also eased 2.3 percent in March on subdued demand for coarse grade wool.
Beef prices lifted 2.9 percent due to stronger prices in the US for imported manufacturing grade meat, as more Australian and New Zealand beef is sold directly to China.
The horticulture index was stable and while strong crops are expected, markets are likely to absorb the additional volume without hindering prices, said Kilsby.
International forestry prices lifted 0.4 percent in March, following a similar lift the previous month. Increased demand from China following the Chinese New Year holiday has kept pricing strong.
Chinese construction demand remains strong despite caution surrounding economic growth rates. Prices of both export grade logs and pulp logs lifted during March. Further lifts in the price of export grade logs are expected as the market remains firm.
Aluminium prices lifted 0.4 percent on the month in March, adding to the gains made in February. Supply from Russian aluminium company Rusal has resumed to Europe and the United States after sanctions were lifted at the end of January.