Beyond the floods: Commodity markets in New Zealand

Published 2023년 3월 15일

Tridge summary

Commodity prices have seen a decline of 20% to 30% since their peak in Q2 2022, due to weaker fundamentals and cautious Chinese imports. However, there is potential for a price recovery in Q2 2023 with increased buying interest from China. Beef and sheepmeat export prices are stabilizing, but there is downside potential for lamb schedules due to increased processing numbers. The fertilizer market is experiencing a price decrease, with uncertainty about prices after the spring buying period. The effects of Cyclone Gabrielle are expected to influence monetary policy, with the RBNZ predicting short-term inflation spike and maintaining rate hike views. The NZD lost two cents against the USD in February due to USD strength, with a forecast of NZD/USD recovering to 0.66 on a twelve-month view.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Since peaking in Q2 2022, commodity prices have been losing momentum. Average commodity prices have fallen between 20% to 30% from their mid 2022 peaks, depending on the product. The weaker fundamentals are expected to keep a lid on any major price recovery in the near term, with Chinese imports remaining cautious alongside broader demand rationing in other markets. RaboResearch has also lowered its forecast to NZ$ 8.50/kgMS for the full 2022/23 season. However, we think upside price potential remains possible, with China anticipated to show more buying interest from Q2 2023. Beef RaboResearch anticipates that the beef schedule will hold around current pricing levels in March, but there is potential upside. The North Island bull price held at NZ$ 6.65/kg cwt through January and February, which is NZc 52 above the five year average price. The suspension of Brazilian beef exports may provide some pricing support for New Zealand beef exports, but it depends on two things: how long ...

Source: Ruralnewsgroup