NZ: Commodity Price Index fell 1.1% m/m in August - ANZ

Sharon Zollner, Chief Economist at ANZ, notes that the New Zealand economy’s ANZ World Commodity Price Index fell 1.1% m/m in August – its third consecutive monthly decline, leaving the index down 0.5% y/y.

Key Quotes

“Of the 17 commodities in the index, seven fell, four were unchanged and six lifted. Of the six broad categories, only forestry prices managed to squeeze out a small gain. With the exception of the GBP, a weaker NZD acted as shock absorber in the month, more than offsetting lower world prices and driving the NZD index up 0.4% m/m to be up 8.9% y/y.”

“Dairy prices largely maintained last month’s weakness, down 1.4% m/m following a 6.5% m/m fall in July.”

“The meat and fibre index (down 1.1% m/m) was mixed.”

“Forestry prices plateaued, rising just 0.1% m/m to be up 12.3% y/y.”

“Aluminium prices fell 0.7% m/m, but were up 1.9% on a year ago.”

“In world price terms, the shine has come off New Zealand’s export prices of late. However, the NZD is doing its job and keeping exporter incomes afloat. To some extent softer world prices are to be expected, as global growth appears to be past its peak. The question is: to what extent will the weaker CNY/USD hamper Chinese demand? And more broadly, how will global trade uncertainties impact global demand? In this environment, a faster-than-expected slowdown in global growth is a key risk.”