The prices for New Zealand’s main commodity exports have hit their highest level in more than three years driven by a recovery in dairy prices.
ANZ Bank’s commodity price index rose 1.2 percent last month, the third monthly gain in a row, taking the index to its highest level since mid-2014.
The bank said the lift was broad-based, but dairy was the strongest driver with a 3 percent rise. There were also gains for meat, wool and forestry products.
The only commodity to fall was aluminium, down 5.1 percent due to the United States’ plan to impose a tariff on aluminium imports to protect domestic production.
A small fall in the New Zealand dollar also helped to lift returns for local producers.
ANZ senior economist Con Williams said New Zealand was being helped by stronger prices for dairy products such as whole-milk powder and butter.
“Further uncertainty is in store given China’s clampdown on excess production and capacity restrictions to improve air quality. For now, lifting stocks and US-China trade tensions have put downward pressure on prices.”
New Zealand’s terms of trade – a measure of the country’s purchasing power with the rest of the world – are also at a record high.