The ANZ world commodity price index fell 1.4% in July after falling 3.9% in June. The July index was 0.5% lower than it was a year ago. In local currency terms, the July index fell 2.8% but was up 0.3% on the year.
The forestry price index fell 8% as demand from China for logs fell away, said ANZ agriculture economist Susan Kilsby. A high level of supply of logs from New Zealand and other regions has resulted in a build-up of stock on wharves in China, at a time when usage rates have eased.
Building activity slows in China during its hot summer months and buyers are also more cautious than normal due to the impact the trade war between China and the United States is having on manufacturing activity, she added.
Dairy prices fell 1.6% in July, but are now starting to firm, according to Kilsby. Butter and cheese prices remain under some pressure, particularly in Europe. New Zealand skim milk powder has been trading at a premium to product from other sources. Whole milk powder prices are stable and are expected to be supported in the year ahead by relatively tight supply.
The meat and fibre index lifted 1.6% in July following a similar lift the previous month. Higher international prices were recorded for both beef and lamb, with strong demand from China the driving factor.
The horticulture index inched up 0.2% in July and aluminium prices lifted 2.4% in July, to record the first positive price movement since March. Prices are still 13.1% behind levels one year ago, said Kilsby.
-BusinessDesk
