Commodity prices hold steady in February

The ANZ commodity price index of New Zealand exports was unchanged during February, with declines in some areas balanced by gains in others.

Dairy prices in aggregate fell 1 per cent, seafood dropped 4 per cent and the price of skins recorded the largest fall of 10 per cent. Venison prices also dropped 3 per cent. This means seafood prices are now at a 13-month low, wool's back to an 11-month low and skins and casein prices both dropped to 10-month lows.

The overall index was held in balance by logs lifting 4 per cent, as aluminium, beef and kiwifruit prices all gained 3 per cent and lamb lifted 1 per cent. Beef had its third successive monthly price increase, and is now at a record new high.

A strengthening New Zealand dollar against all the country's trading partners saw a 1985 post-float high against the pound and the euro. This translates into a weakening of the ANZ NZ Dollar Commodity Price Index of 4 per cent in February, dropping to a two-year low for this series.

ANZ economist Steve Edwards said while the NZ dollar-priced series has now fallen 17 per cent from its March 2011 peak, it remains 13 per cent above its post-2000 average.

Edwards made special note of a 24 per cent easing in wood pulp prices over the past six months, following two years of increasing prices for the paper-making raw material.

In the 12 months to January 2012, wood pulp exports totalled $660 million. This represents 15 per cent of all New Zealand's forestry-related exports or 1.4 per cent of the country's total merchandise exports.