By BRIAN FALLOW
You might call it the Atkins boom: the popularity of high-protein, low-carbohydrate diets is one of the factors to have pushed export beef prices to their highest levels in at least 18 years.
But the commodity boom is much more broadly based than that.
All but two of the 13 commodities in ANZ's commodity price index rose last month. In world price terms the index rose 3.3 per cent, to be 26 per cent above its level a year ago and 34 per cent above its low two years ago.
The increase was only partially offset by a stronger exchange rate.
Despite the kiwi dollar rising 2.1 per cent against the United States dollar, 3.8 per cent against the Australian and 1.1 per cent against the euro last month, in New Zealand dollar terms commodity prices still rose 1.5 per cent to be 18.4 per cent up on a year ago.
ANZ economist John Bolsover said that in New Zealand dollar terms the commodity index was at its highest level since April 2002 and higher than at any time during the first 14 years of the index, between 1986 and 1999.
World prices for lamb and beef are the highest they have been in the 18-year history of the index, while dairy prices are at eight-year highs.
Beef prices rose 5.8 per cent last month. The surge in demand in the key US market was partly seasonal, Bolsover said, but also reflected the popularity of high-protein, low-carbohydrate diets.
Tight supplies of US and Australian beef and the ban on Canadian beef also supported the US market.
Unlike Australia, New Zealand was likely to fill its US import quota, he said.
Lamb prices rose 1.9 per cent to be 14.8 per cent up on a year ago, aided by continued tight supplies in Britain and lower production in Australia.
Dairy prices rose 5 per cent reflecting in part the lingering effect of drought in Australia.
Skins and hides climbed 11.5 per cent as they continued to retrace their falls in the middle of last year.
Other inedible commodities benefited from stronger growth among New Zealand's trading partners. Wool prices rose 2.5 per cent, logs 6.9 per cent, sawn timber 2 per cent, wood pulp 4.8 per cent and aluminium 3.2 per cent.
The two commodities to suffer lower prices were kiwifruit, down 7.3 per cent, and apples, down 6.6 per cent.
Commodities represent about 62 per cent of New Zealand's exports. Statistics New Zealand said last week that dairy products, meat and fruit were the main contributors to a 22 per cent increase in exports in May compared with May last year.
However, the Reserve Bank warned last month that prices were higher than could be explained by the state of world demand.
It expects that over the coming months the supply factors, such as the drought in Australia, that have supported the world price of our commodities will dissipate.
Beef farmers thank diet for price hike
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