The long-heralded turning point in export prices may be at hand with the ANZ world commodity price index slipping 0.8 per cent last month, only the second monthly decline in two years.
But the drop was matched by a drop in the exchange rate so that in New Zealand dollar terms commodity prices were unchanged.
"This highlights the potential for currency to act as a shock absorber should commodity prices move off recent highs in coming months," said ANZ economist John Bolsover.
World prices for a basket of New Zealand's 13 largest export commodities have risen by 5 per cent over the past year and nearly 40 per cent from their low four years ago.
But, in New Zealand dollar terms, they are a more modest 25 per cent above their 2002 lows and 7.5 per cent weaker than a year ago.
Lamb and dairy products are the only commodities to have held their own in New Zealand dollar terms during the past year.
Last month, eight of the 13 commodities in the ANZ index fell and only three - lamb, venison and sawn timber - increased.
The kiwi dollar has dropped nearly 4c or 5 per cent against the US dollar during the past fortnight.
World prices for lamb edged up 0.1 per cent last month and remain near record highs in the 19-year history of the index. Tight supply from New Zealand has helped keep prices high despite the Easter seasonal peak for demand in Europe having passed.
Dairy prices were unchanged. "Prices have settled near a nine-year high courtesy of a tight demand/supply balance and little in the way of stocks to overhang the the global market," Bolsover said.
Beef prices fell 0.5 per cent, ending a four-month run of rising prices.
Apple prices fell 5.2 per cent in the month, after the normal seasonal pattern of a decline from the start of the season in May, but they are also down 10 per cent on June last year.
Log prices fell 4.4 per cent last month, reflecting falling prices in Asia.
Falling kiwi offsets commodities dip
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