The weaker New Zealand currency meant better returns for exporters, but could also work against them, an ANZ agri economist said. Photo: 123RF
A weaker New Zealand dollar has cushioned a fall in the prices of leading commodity exports.
The ANZ Commodity Price Index slipped 0.5 percent in September, the fifth consecutive monthly fall, to touch a 16 month low, on the back of weaker returns for most major products including meat, horticulture and aluminium.
But when translated into New Zealand dollars the returns were up 3.3 percent on August, reflecting a 2.5 percent fall in the trade weighted value of the currency.
ANZ agri economist Susan Kilsby said the weaker currency meant better returns for exporters, but it could also work against them.
"The weak NZ dollar means exporters are not benefiting from falling shipping prices if the cost of those services are priced in US dollars."
Global shipping prices had been falling but in addition to the currency local exporters were getting the full benefit, she said.
"Here, exporters are still challenged by infrequent and less-reliable shipping services, but upwards pressure on pricing has dissipated."
The impact of China's Covid elimination policy, which has resulted in lockdowns, disrupted services and reduced demand was evident in softer returns for lamb, logs and aluminium.