The scale of the monthly decline, the largest since November 2022, signals a meaningful reset in New Zealand’s export commodity backdrop after several months of relative strength, though the index remaining up on a yearly basis suggests the underlying trend has not turned decisively negative. Dairy’s 6.5% monthly fall is the standout driver given its weighting in the index, and coincides with New Zealand’s upcoming season ramping up supply, a seasonal dynamic that traders will want to distinguish from any broader demand deterioration. ANZ’s own characterisation of commodity prices as being in a less predictable phase, tied to volatile oil, gas and petrochemical markets alongside elevated shipping rates, points to geopolitical risk continuing to inject noise into the export price outlook. The NZD Commodity Price Index falling by a similar margin despite a broadly stable currency over the month suggests the price weakness is being felt directly rather than being amplified or offset by exchange rate moves, though ANZ flags a stronger kiwi as a possible additional headwind into August.
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Earlier:
New Zealand commodity prices posted their sharpest monthly fall in nearly four years in July, led by a seasonal slide in dairy.
Summary:
- ANZ World Commodity Price Index fell 3.9% month on month in July (prior -1.1%), the largest monthly fall since November 2022, though still up 0.5% year on year
- Dairy prices fell 6.5% month on month and are down 11.3% year on year, with whole milk powder down 5.3% as global supplies weighed on prices; casein remains a bright spot, up 28.2% year on year
- Meat and fibre index fell 3.0% month on month, its first monthly fall since May 2025; wool fell 12.0% but remains up 69.8% year on year, while beef fell 4.4% month on month in overseas markets but is still up 16.5% year on year
- Horticulture index rose 2.1% in July, driven by rising gold kiwifruit prices offsetting weaker apple prices
- Forestry index rose 0.7% month on month and 10.7% year on year, aided by improved shipping and diesel costs
- Aluminium prices fell 8.2% month on month as Middle East production, down around 35% due to conflict-related damage, was offset by increased output from China and Europe; prices remain up 21.0% year on year
- NZD Commodity Price Index fell 4.0% month on month, with the NZD itself up just 0.1% on average over July
New Zealand commodity prices recorded their sharpest monthly decline in nearly four years in July, according to ANZ Research, as a broad-based pullback led by dairy weighed on the ANZ World Commodity Price Index. The index fell 3.9% month on month, the largest fall since November 2022, though it remains up a modest 0.5% on a year earlier.
Dairy prices were the primary driver of the decline, falling 6.5% month on month and now down 11.3% year on year, as sales tied to New Zealand’s upcoming season ramped up supply. Whole milk powder prices fell 5.3% during the month, with strong global supplies weighing on prices as had been anticipated. Casein continued to stand out as a bright spot, up 28.2% year on year, with ANZ noting that caseins, alongside whey and milk protein concentrates, are increasingly in demand as high-value protein ingredients across a wide range of consumer products, with demand currently outpacing supply.
The meat and fibre index also weakened, falling 3.0% month on month for its first monthly decline since May 2025. Wool prices fell 12.0% during the month but remain up a substantial 69.8% year on year, with ANZ noting that while supply remains tight, buyers are exercising more caution than they have over the past year. Beef prices fell 4.4% month on month in overseas markets amid strong competition from South American exporters, though the beef price index remains up 16.5% year on year thanks to tight global supplies.
Elsewhere, the horticulture index rose 2.1% in July, driven mainly by rising gold kiwifruit prices that offset weaker apple prices, while green kiwifruit prices were strong early in the month before weakening as July progressed. The forestry index rose 0.7% month on month and is up 10.7% year on year, with improving shipping and diesel costs helping log prices recover somewhat even as demand in China remains soft. Aluminium prices fell 8.2% month on month, with ANZ noting that Middle East production, which typically accounts for 8-9% of global output, remains down around 35% due to conflict-related damage, though increased production from China and Europe has brought prices back near pre-conflict levels; aluminium remains up 21.0% year on year.
ANZ noted that New Zealand’s commodity prices are currently in a less predictable phase, reflecting the ongoing ebb and flow of geopolitical events, with oil, gas and petrochemical prices remaining highly volatile alongside grain and oilseed markets. Elevated shipping rates were also cited as an additional downward pressure on commodity prices. The NZD Commodity Price Index fell by a similar 4.0% month on month, despite the New Zealand dollar rising just 0.1% on average across July, and ANZ cautioned that a rising currency could present a stronger headwind to commodity price competitiveness in August based on recent exchange rate movements.
This article was written by Eamonn Sheridan at investinglive.com.