Energy Surge and Middle East Conflict Boost New Zealand Commodity Prices
The ANZ World Commodity Price Index rose 0.6% month-on-month and 1.0% year-on-year in September, driven largely by higher energy prices. The weaker New Zealand dollar further boosted the index by 2.8% in local-currency terms.
Aluminium prices climbed 1.1% during September, supported by supply disruptions linked to the Middle East conflict. Year-on-year, aluminium prices are up 23%. Dairy prices also increased 1.0%, with skim milk powder leading the gains at 9.2% month-on-month, now 41.1% higher than a year earlier. However, butter prices fell 5.1% due to stronger milk production in the Northern Hemisphere.
The meat and fibre index declined 0.8% as lower beef prices offset gains elsewhere, while horticulture and forestry prices both saw increases. The Middle East conflict has also raised freight rates, impacting shipping costs and New Zealand’s trade position.
A weaker New Zealand dollar amplified the benefits for exporters, raising the value of export earnings in local-currency terms. However, this same currency movement makes imports more expensive, creating a mixed impact for New Zealand’s economy.