The New Zealand dollar's softening during October was not enough to offset the decline in commodity prices - which fell for the fifth month in a row.
The overall drop to the ANZ world commodity price index by 2.4% for October was identical to September's result, ANZ Economist Miles Workman said.
The annual growth rate was down by 5.6% against a year ago, having been driven down by weaker prices for most commodities, he said.
Month on month, dairy prices fell 3.1%, meat and fibre declined 2%, horticulture shed 4.3% and forestry lost 1.5%; albeit the latter two were both up on a year ago, by respectively 4.5% and 6.1%.
“The softening in the New Zealand dollar during October wasn't sufficient to offset weak global sentiment prevailing in commodity markets,” he said.
Trade disruption had dented confidence in New Zealand's main export markets, with the impact on China of particular concern, given this country's exposure to this market.
“The CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) that takes effect in 2019 will be welcomed by exporters, with a particular benefit being levelling the playing field with Australia for beef exports to Japan,” Workman said.
Monthly dairy prices fell 3.1%, or by 12.3% on last year, and were now at their lowest level since September 2016.
“Lower prices were recorded for milk powders, cheese and milkfat products. Casein was the only dairy category to lift in price, due to tighter supply of this product relative to other dairy commodities,” Workman said.
Whole milk prices softened 3.3% during the month as seasonal supply put downward pressure on prices, while skim milk prices continued to “bounce around” at low levels.
“High global stocks of skim milk powder will keep the price contained until those clear, which isn't expected to occur until the latter part of 2019,” he added.
*Simon Hartley is senior business reporter and assistant chief reporter for the Otago Daily Times.