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Strong New Zealand dollar weakens export sector earnings

Strong New Zealand dollar weakens export sector earnings

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A strong New Zealand dollar is taking the gloss off the export sector.

A pile of Pinus radiata logs waits for export at the port in Lyttelton.

Logs were the standout commodity for the month, with prices lifting by nearly 2 percent.
Photo: 123rf

ANZ Bank’s commodity price index for last month was fractionally lower, as a rise in log prices helped to offset softness in dairy and meat prices, which have been the mainstays of strong export earnings through the pandemic.

But when taking into account the rise in the New Zealand dollar, the index fell by 1.3 percent.

“It’s really challenging conditions in the international market at the moment selling products due to the weakening economic conditions affecting most markets and we’re seeing mixed results from our various commodities,” ANZ agri-economist Susan Kilsby said

Logs were the standout commodity for the month, with prices lifting by nearly 2 percent.

“We’re starting to see forestry pick up a little bit from the lower levels we have seen in recent months, once again that relates to activity within China.

“At this time of the year there’s quite strong building activity and we’re seeing good uptake of logs.”

However, dairy prices retreated by 1.3 percent for September, but the rate of fall steadied over the month.

“Dairy prices are holding up quite well considering there are large volumes of product being offered from New Zealand at this time of the year,” Kilsby said.

Some of the strong gains in meat and fibre prices in August were wiped out in September, as wool prices and demand for premium meat cuts continue to be weak overseas.

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