By Brian Fallow
WELLINGTON - Prices for New Zealand's main commodity exports resumed their downward trend in February.
ANZ Bank's world commodity price index fell 1.3 per cent in February, to be 6.6 per cent lower than a year before.
Lower prices for wool, aluminium, wood pulp, butter and milk powder outweighed better prices for beef and sawn timber, ANZ said.
The impact on export receipts was accentuated by a strengthening of the New Zealand dollar so that in local terms the index fell 2.8 per cent in February.
Over the past year the currency's fall has kept pace with the weakening in commodity prices; in New Zealand dollar terms commodity prices in February were 0.6 per cent higher than at the same time last year.
ANZ economist David Drage said commodity prices had declined substantially over the past two years, undermined initially by the Asian financial crisis and then the weaker world growth which resulted. Asia had accounted for about 70 per cent of the surge in demand for commodities in the first half of the 1990s, Mr Drage said.
"With world industrial production expected to remain weak over 1999, a sustained recovery on commodity prices is unlikely in the short term." But world economic activity was expected to strengthen in 2000, providing support for commodity prices, he said.
Commodity export prices remain in slump
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