ANZ Commodity Price Index rises for eighth straight month in December

The ANZ Commodity Price Index rose 0.7 percent sequentially in December, as compared with the upwardly revised 3.2 percent rise in the prior month. This is mainly because of the continuing comeback story of dairy prices in the second half of 2016. The rise in index in December was the eighth straight rise, driving it 19 percent higher over the course of 2016.

The NZD Commodity Price Index recorded a sequential growth of 2 percent in December, the fifth consecutive sequential rise and the fourth monthly gain above 2 percent. The NZD’s continued descent against the USD and GBP in December was the major helping hand, noted ANZ. The NZD TWI rose 0.1 percent month-on-month. However, it suggests little exporter relief elsewhere.

Non-dairy commodity prices were disappointing, dropping 1.9 percent sequentially. Just three out of the 12 non-dairy commodities in the index were up in December, with declines focused mainly in the fibre and meat group. But, several sectors indicated price improvement across the course of 2016, though NZD moves continued to be a drag on local returns in several cases.

Looking into sectors, dairy prices increased for the seventh consecutive time, rising 3.9 percent sequentially in December. Tight global milk supplies and rebounded Chinese import demand were the key drivers for the price increase. All dairy-based products rebounded in December, led by butter, and followed closely by whole-milk powder.