NZ commodity prices rise for 7th month, led by butter, flat in kiwi dollar terms

New Zealand commodity prices rose for a seventh month in February, led by gains in the price of butter, though the strength of the local currency meant they were flat in kiwi dollar terms.

The ANZ Commodity Price index rose 1 percent to 275.3 last month, with 10 of the basket of 17 raw materials lifting in price. Five were unchanged and two fell. In local currency terms, the index rose 0.2 percent in February to 177.6. The kiwi dollar recently traded at 82.34 US cents, and has been seen as the main cause for lagging exports as it eats into returns from international sales.

Butter prices rose the fastest in the month, up 4 percent, followed by a 3 percent gain in wood pulp prices and a 2 percent increase in milk powder and lamb prices. Seafood, aluminium and pelt prices rose 1 percent, and casein and lumber prices rose by less than half a percent. Wool and beef price both declined 2 percent.

The figures come as drought ravages the North Island’s Northland region and threatens other areas. Fonterra Cooperative Group sees rising global dairy prices in the second half of the year, though the dry conditions means local production will be flat.

Government figures last week showed a trade balance deficit in January with dairy exports falling faster than expected.

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