NZ: Commodity Price Index lifted 1.5% m/m in May - ANZ

The ANZ World Commodity Price Index of NZ lifted 1.5% m/m in May, the fifth consecutive rise in 2018 and of the 17 commodities, ten rose, three were unchanged and four declined – the largest contributions came from cheese, skim milk powder and lamb, together making a 1.1%pt contribution to the monthly change, explains the research team at ANZ.

Key Quotes

“Prices rose across all broad categories except seafood, which was unchanged. Aluminium prices lifted by most (up 3.2%), finding further support from global trade tensions; horticultural prices (up 2.8%) were a close second. The NZD depreciated against major trading partners except the GBP. This helped boost NZD returns 5.0% m/m, lifting annual growth to 6.8%.”

“Dairy prices made another respectable monthly gain in May (+1.5% m/m, +4.7% y/y). Prices have been supported by slowing global production growth across major export regions and ongoing strength in global demand.”

“New Zealand’s merchandise terms of trade came off their all-time high in Q1, but remained at an elevated level, which will continue to support national incomes. Our ANZ Commodity Price Index is consistent with ongoing strength in export prices, which are expected to broadly keep pace with import prices and continue to support an elevated terms of trade from here.”