NZ commodity prices fall from May record

New Zealand commodity prices fell from a record in May, weighed down by lower prices for dairy products.

The ANZ Commodity Price Index dropped 1.6 per cent to 328.2 in May, its second-highest level, from 333.5 in April. Six commodity prices weakened, nine strengthened and two were unchanged. Prices for dairy products dropped 5 per cent but remained the second-highest on record.

Skim milk powder led the decline, falling 12 per cent. Butter prices fell 7 per cent, beef slid 5 per cent and whole milk powder and pelts dropped 4 per cent with the price of aluminium down 2 per cent. Wood pulp and venison prices were unchanged.

Log prices jumped 11 per cent, driven by resurgence in demand from China even as New Zealand's biggest trading partner imported less logs.

Export fruit prices recorded the next highest increase as the first shipments of the new season's harvest reached Northern Hemisphere markets. Kiwifruit prices lifted 9 per cent and apple prices gained 8 per cent. Casein and seafood prices increased 3 per cent, cheese and wool prices rose 2 per cent and lumber and lamb prices lifted 1 per cent.

In New Zealand dollar terms, the index rose 0.7 per cent as a decline in the currency was greater than the fall in prices. In local currency terms, the index is 7 per cent off its March 2011 peak.

ANZ's index includes commodities which make up about 60 per cent of New Zealand's $46 billion annual export earnings.