Declining dairy prices have contributed to an almost 4% dip in New Zealand's commodity price index, which is just slightly ahead of Australia's index.
The ANZ commodity price index decreased 3.7% in June, mirroring international trends in dairy prices, the prices of nine commodities falling, five increasing and three remaining unchanged.
ANZ economist Steve Edwards said New Zealand's commodity prices remained in a better position than Australia's, the Reserve Bank of Australia reporting a 4.1% decline in Australia's commodity prices for June.
After conversion to local terms the Australian dollar commodity price index was 27% below its October 2008 peak, while the New Zealand dollar commodity price index was just 6% below its March 2011 peak.
Westpac economist Nathan Penny said commodity prices continued ''to come off the boil'' during in June, as global dairy prices fell from their record April highs.
''However, this was more than compensated for by a fall in the New Zealand dollar,'' he said.
He expected world dairy prices to continue falling during 2013 as supply pressures eased, but they were likely to remain high by historical standards, underpinned by ''robust'' Chinese demand.
''That will bring the overall commodity price index lower, even as we expect the NZ dollar to reverse some of its recent weakness over the second half of this year,'' he said.
Four of the five dairy components eased in June, whole milk and skim milk powder prices dropping 9% and 8% respectively, butter prices falling 4% and cheese prices easing 2%. Beef was down 7%, while apple, aluminium and lamb prices all eased 1% and pelts prices had a minor dip.
Wool prices recorded the strongest increase, up 5% for the month. Kiwifruit rose 3%, while casein and seafood were both up 2%. Logs recorded a ''modest'' increase, while prices of wood pulp, venison and sawn timber were all unchanged.
