Commodity price index dropped in June, ANZ says, but index still at third highest level since series began in 1986

The monthly ANZ Commodity Price Index fell in June, its first drop in 10 months, with kiwifruit and beef prices recording the biggest falls.

The Index dropped 1.2% in the month of June, its first fall since August last year. The price of seven commodities recorded falls in June, six rose and four were unchanged. Despite the fall, the index remains at its third highest level - 308.5 - since the series began in January 1986.

Kiwifruit and beef prices recorded the largest declines. Kiwifruit fell 9% month-on-month, and beef prices dropped 8%. The price of whole milk powder and skins slipped 3%, aluminium and apple prices slipped 1% and log prices fell slightly.

"The decrease in the fruit prices reflects the traditional seasonal decline, as the Northern Hemisphere export season progresses and the price premium of the new season’s fruit is reduced," ANZ economist Steve Edwards said. "The drop in beef prices reflects an oversupply of imported product into the United States. Demand had picked up late in the month, spurred on by the Fourth of July holiday weekend."

Meanwhile, wool prices hit a new record high. Wool and skim milk powder prices rose 5% in June, and venison prices rose 3%. Lamb, sawn timber and seafood prices increased by up to 1%.

The New Zealand dollar's rise compounded the drop in commodity prices, Edwards said, resulting in the ANZ NZ Dollar Commodity Price Index falling 3.3% in June. The main index is measured in US dollars.