The divergence between the world price index, up 1.3% year on year, and the NZD-denominated index, down 0.3% in May on currency strength, highlights how much of the recent gains are being offset for New Zealand exporters by exchange rate movements rather than being passed through in full. Aluminium remains the clearest read-through from the Middle East conflict, with regional production still running well below pre-conflict levels and raw material import constraints likely to keep upward pressure on the metal even as broader oil-linked inflation pressures ease elsewhere. The forestry sector illustrates a similar dynamic to aluminium, where higher in-market log prices are being absorbed by freight costs rather than flowing through to wharfgate returns, a pattern likely to persist while shipping disruption continues.

ANZ’s World Commodity Price Index rose 0.7% m/m in May, up 1.3% y/y, led by wool (+75.3%), aluminium (+49.1%) and beef (+25.3%), with Middle East conflict effects most visible in aluminium prices and shipping rates.

Summary:

• ANZ’s World Commodity Price Index rose 0.7% m/m in May, with all commodity groups posting incremental gains, and is up 1.3% over the past year
• Wool prices rose 14.0% m/m and are up 75.3% y/y, the highest level for that component since October 2011, driven by strong demand and low supply
• Aluminium prices rose 1.8% m/m and are up 49.1% y/y, with Middle East production still down 35% from pre-conflict levels after a large smelter was damaged in late March
• Dairy prices rose just 0.1% m/m and are down 11.4% y/y, with skim milk powder up 25.8% y/y even as butter prices fell 29.2% over the same period
• The horticulture index rose 3.4% in May as New Zealand’s main export produce reached overseas supermarket shelves, with early season price signals described as encouraging
• The NZD Commodity Price Index fell 0.3% m/m in May on a slightly stronger New Zealand dollar, even as the World Price Index rose

ANZ’s World Commodity Price Index rose 0.7% in May from the prior month, with every commodity group in the index posting incremental gains, according to ANZ Research. The index is up 1.3% over the past year, with wool, aluminium and beef standing out as the strongest performers amid tight global supplies across all three.

Wool has been the standout story, rising 14.0% in May and 75.3% over the past year to reach its highest level since October 2011. Like beef and lamb, which are stabilising near record-high levels, wool is benefiting from a combination of strong demand and constrained supply that continues to tilt pricing in producers’ favour. The meat and fibre index as a whole rose 0.4% in May and is up 19.4% year on year.

Aluminium prices climbed 1.8% in May and are up 49.1% over the past year, with the Middle East conflict a direct driver of the move. The region accounts for roughly 8 to 9% of global aluminium production, and a large smelter was damaged in late March, while raw materials including alumina and bauxite have been unable to reach the Persian Gulf region. Production out of the area remains down 35% from pre-conflict levels. Shipping costs have also been affected by the conflict, with higher fuel surcharges and increased congestion at some ports.

Dairy prices told a more mixed story, rising just 0.1% in May and sitting 11.4% lower than a year earlier as global supply remains plentiful. Underneath that headline figure, the components have diverged sharply, with skim milk powder prices up 25.8% year on year even as butter prices have fallen 29.2% over the same period, as the high butter prices that supported the broader dairy complex in 2024 and 2025 continue to unwind. The horticulture index rose 3.4% in May as New Zealand’s main export produce began reaching overseas supermarket shelves, with early price signals in the new season described as encouraging, while the forestry index rose 0.6%, with in-market log prices up 11.9% since the Middle East conflict began, though those gains have largely been absorbed by higher shipping costs rather than flowing through to New Zealand wharfgate prices.

In New Zealand dollar terms, the index told a slightly different story, falling 0.3% in May as the currency strengthened, even as the underlying world price index moved higher. ANZ’s next Commodity Price Index update is scheduled for release on 6 July.

This article was written by Eamonn Sheridan at investinglive.com.