ANZ’s New Zealand commodity price index slipped 1.6 per cent in November. Overall prices were 12 per cent lower than a year ago and down 15 per cent from a recent peak in February.
Last month 10 commodity prices in the index fell, while three increased and four were unchanged. Skim and whole milk powder prices each hit five-year lows after dropping 7 per cent and 6 per cent, respectively.
Dairy is New Zealand’s chief export but prices are now 37 per cent below the same level a year earlier and 45 per cent below a peak in April April 2013.
In August, S&P warned New Zealand of risks to the country’s growth outlook and credit rating because of its dependence on commodity exports. S&P said:
If demand for New Zealand’s key exports were to weaken sharply, the country’s economic growth would slow, unemployment rise, and property values fall.
The Kiwi dollar has flat after the data but since early July it has declined nearly 11 per cent, as the price of key commodity exports declined.
Source: FT