2 Oct 2014

Commodity prices continue to slide

4:34 pm on 2 October 2014

New Zealand's commodity prices fell 1.3 percent in September, the seventh month in a row in which prices have declined.

ANZ Bank's Commodity Price Index fell 1.3 percent - and that did not take into account the latest fall in dairy prices in Fonterra's global dairy auction last night.

Dairy products led the latest drop with skim milk powder prices down 14 percent from August, at their lowest level since June 2012.

Apple prices also fell 11 percent, while butter, cheese, wool and aluminium prices were also down.

However, the price of beef jumped 10 percent to a record high. It is the fifth consecutive monthly rise in beef prices which have risen 41 percent since April on renewed demand from the United States.

In New Zealand dollar terms, the nation's commodity prices rose 1.6 percent - the first increase since February - due to the declining domestic currency.

Economists estimate that falling dairy prices will take $6 billion out of the economy this dairy season compared with the previous one, shaving two-and-a-half percentage points off economic growth.

The economy grew 3.5 percent in the year ended June.

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