Export commodity prices continued to slide last month and in NZ dollar terms are now 17.6 per cent lower than their peak a year ago, according to ANZ's commodity price index.
In world price terms the index fell 1.7 per cent last month to its lowest level since December 2010 and 10 per cent off its high last May. Eleven of the 17 commodities ANZ tracks fell, three were unchanged and three rose.
Dairy products, which collectively make up nearly 43 per cent of the basket, were all lower, ANZ economist Steve Edwards said.
"Butter prices dropped 6 per cent (to a 29-month low), skim milk powder prices eased 4 per cent (a 15-month low), cheese and whole milk powder prices dropped 3 per cent," he said.
"We have seen a bit of pick-up in the latest online dairy [auction] prices, but on the other hand we have seen a sharp fall in the most recent lamb prices."
The index recorded a 2 per cent drop for the month in lamb prices, but beef rose 2 per cent to a new high.
Log prices eased 0.5 per cent but wood pulp was up 3 per cent.
On a trade-weighted basis, the New Zealand dollar eased in March but the drop did not fully offset the fall in the overall level of commodity prices, and in New Zealand dollar terms the index slipped 0.2 per cent last month to its lowest level since January 2010.
Despite softer prices record dairy volumes in the December quarter, reflecting benign growing conditions, contributed to a $500 million increase in the annual goods surplus in the current account, to $3.6 billion, the highest in 10 years.
Consensus forecasts for growth among New Zealand's main trading partners are 3.5 per cent this year and 4 per cent next year.
But the Treasury says that in the key Chinese market, while the consensus view remains a soft landing (growth between 7 and 8 per cent), there are increasing concerns of a hard landing (growth around 5 per cent).
China's industrial production growth eased more than expected to 11.4 per cent and retail sales growth fell to 14.5 per cent. compared with the 17 per cent seen in much of last year.