NZ commodity prices rise 3 per cent in May

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New Zealand commodity prices rose 3.2 per cent as a broad-based strength across the country's locally produced raw materials was led by the continued surge in apple and kiwifruit prices.

The ANZ Commodity Price Index increased to 291.9 in May from 282.9 in April and was 26 per cent higher than the same month a year earlier. That was led higher by a 12 per cent gain in horticulture prices, with apple prices up a monthly 7.5 per cent and kiwifruit prices rising 14 per cent.

"A late picking season due to the wet weather and low chill hours meant the market was primed for new-season fruit to arrive," ANZ Bank New Zealand agri economist Con Williams said in a note. "A slower start for green (kiwifruit) exports and a higher proportion of gold, especially in Europe, is supporting average export prices."

Government data last month showed the value of fruit exports rose 3.4 per cent to $444 million in April from a year earlier, for an annual gain of 14 per cent to $2.77 billion, making it the country's fourth-biggest export commodity.

In New Zealand dollar terms, the index rose 4 per cent in May and 22 per cent in the year, leaving it 5 per cent below the record high in March 2011.

Williams said the previous spike was due to dairy prices, whereas recent gains were across forestry, horticulture and meat as well, meaning it was "more widely spread across sectors, regions and individual businesses".

The index shows dairy prices rose 3.8 per cent last month and were more than 50 per cent higher than a year earlier, with higher prices across most milk powders and milkfats.

"Global prices were supported by lower peak milk flows in Europe's major producing countries such as Germany and France, due to cold spring conditions," Williams said. "Continued demand from China and broader Asia also continued to boost prices."

Meat prices rose 2.8 per cent, with beef prices up 2 per cent and lamb prices up 2.8 per cent, although wool prices remained "lacklustre" with a 0.3 per cent monthly decline taking the annual drop to 34 per cent.

Aluminium prices slipped 0.4 per cent in May having gained 23 per cent over the past year, while seafood prices edged up 0.4 per cent.

Wood pulp prices increased a monthly 2.6 per cent and log prices gained 0.6 per cent.