New Zealand commodity prices slipped further in November, with dairy prices leading the pack lower although the softening was across the board.
The ANZ Commodity Price index slipped 0.9 per cent to 291.9 in November and was up 6 per cent in the year.
In New Zealand dollar terms, the index was at 223.3, up 1.5 per cent in the month and 12 per cent in the year as the New Zealand dollar continued to fall against major trading partners.
The kiwi dollar has come under significant pressure due to political uncertainty after the change in government. The trade-weighted index was recently at 72.39 and was down 2.1 per cent last month.
"All up, the cyclical top is in for New Zealand's export values, with dairy prices under more pressure," ANZ Bank New Zealand agri economist Con Williams said.
"Supply considerations will continue to hold sway, but solid demand in most markets and sectors should provide some durability. Combined with a lower NZD this is helping buffer local exporter returns."
Nine of 17 subcomponents fell and only five rose in the latest month, so the softening was broad-based, Williams said.
Dairy prices fell, with whole milk powder prices down 6.2 per cent in the month and skim milk powder falling 6 per cent.
Williams said New Zealand production of whole milk powder had exceeded expectations and buyers are taking a "wait and see" approach as inventories build up in China, with skim milk powder hit by improvements in European milk supply and expectations the intervention scheme will be changed to a tendering process, which provides no defined price floor.
"The pressure on SMP has been depressing prices for other protein products too, such as casein and caseinates," Williams said. "In particular demand from the US and Mexico appears to have softened for casein."
Meat prices held up, with lamb down just 0.5 per cent, better than its usual seasonal fall and venison remaining at record highs. Seafood prices were flat.
Horticulture prices lifted 3.9 per cent in the month, with kiwifruit bolstered by lower local supply and softer European production.
Forestry continued to gain, with wood pulp prices up 13 per cent in the month on strong Chinese demand, low inventories and supply disruptions for other major suppliers. Log export prices were up 0.9 per cent. Aluminium prices fell 1.5 per cent as forced Chinese smelter production cuts came into effect.