The ANZ's commodity price index has started the year with three consecutive monthly gains, underpinned by dairy, meat, wool and forestry.
The index rose 1.2% from February to March and is now up 4.8% on the index's 2017 close.
ANZ agri-economist Con Williams said there was broad based support driven by dairy, meat, wool and forestry. The only sour note came from aluminium prices.
“The laggard was aluminium, which has been caught up in US-China trade tensions alongside increasing inventory levels,” Williams said.
Overall, the exports received another boost from the $NZ falling against the currencies of most major trading partners, the boost lifting returns 2%.
“Dairy prices continued to push higher in March, up 3%, driven by lingering New Zealand supply concerns, very low Global Dairy Trade (auction) supply and solid demand from a number of key markets,” Williams said.
While New Zealand had managed to maintain a “significant premium” against other dairy producers, skim milk powder prices slipped 3.8%, due to higher seasonal European supply and existing European Commission stockpiles.
Forestry prices had booked 18-months of consecutive gains and still managed a 0.3% lift again in March, while wood pulp prices were unchanged.
“Domestic and export log and lumber prices remain well above last year, with solid demand domestically and from China,” Williams said.
However, he cautioned the upward trajectory for forestry prices had “flattened out in recent months.”
Williams said aluminium prices fell 5.1% month on month.
“The sector is not short on controversy,” he said.
Centre of attention was the tariff announcements from the US, but further uncertainty was in store given China's clampdown on excess production and capacity restrictions to improve air quality. For the time being, rising stocks of aluminium and the US-China trade tensions had put downward pressure on prices, he said.
The 0.3% meat and fibre mix was lifted by wool and lamb prices. Beef markets had continued to perform well, unchanged, while wool prices continued to lift off lows which was driven by bargain hunting.
Lamb prices had “surprisingly lifted” despite the close of the seasonal special-occasion window and shift to frozen product, Williams said.
Seafood prices were unchanged while he described horticultural products as still being in “hibernation.”
*Simon Hartley is senior business reporter and assistant chief reporter for the Otago Daily Times.