Low dairy prices depress index as other products hold their own

Dairy products make up 47 per of the index and are 45 per cent below their peak last April. Photo / Christine Cornege

ANZ's commodity price index fell for the ninth month in a row in November, as milk powder prices hit five-year lows.

The index, a basket of 17 commodities weighted by their relative contribution to export income, fell 1.6 per cent to be 15 per cent below its peak in February.

Dairy products led the decline, with skim milk powder and whole milk powder falling 7 per cent and 6 per cent respectively to their lowest levels since 2009 while cheese, butter and casein all fell 2 per cent to two-year lows. Dairy products make up 47 per of the index and are 45 per cent below their peak last April.

Excluding dairy, commodity prices in the index rose 0.8 per cent last month to be 14.5 per cent higher than a year ago and just 1 per cent shy of the peak last September, ANZ economist Steve Edwards said.

Wool prices dropped 4 per cent, pelts 3 per cent, beef 2 per cent, logs 1 per cent and timber 0.25 per cent, but aluminium rose 5 per cent, kiwifruit 2 per cent (to record highs) and sheepmeat 0.5 per cent. Prices of seafood, wood pulp, apples and venison were unchanged.

In New Zealand dollar terms the ANZ index also fell 1.6 per cent last month, to be down 9.9 per cent on a year ago. Although the kiwi dollar was down against the US dollar, it firmed against the yen, euro, pound and Australian dollar.