New Zealand Agribusiness October 2023: El Niño Has Officially Arrived
Here are the main highlights for some of New Zealand’s key commodities this month. The full report provides an overview of the developments to watch in the upcoming weeks.
- Dairy: Milk supply growth across key export regions is set to remain weak over the remainder of 2023 and into 2024. This should help support dairy commodity prices – and runs the risk of a price whiplash should demand outpace supply.
- Beef: RaboResearch anticipates schedule prices to be supported by stronger US import prices, which could pull New Zealand prices up over the coming weeks.
- Sheepmeat: With ongoing high volumes of Australian lambs in the global market and the continued soft demand, prices are expected to continue moving sideways over the coming weeks.
- Farm Inputs: A new supply and demand balance for fertilisers and agrochemicals could be emerging, bringing the first indications of next season’s price range. The outlook remains positive, but energy and currency developments are poised to make things a bit blurry.
- FX/Interest Rates: The NZD traded largely sideways in September to close the month just below USc 60. Better-than-expected Q2 GDP figures and improving trade numbers saw market expectations of future OCR increases lift during the month, but the RBNZ left rates on hold at 5.50% at the October meeting.
- Oil & Freight: Crude oil and distillate prices surged in September due to ongoing production cuts, dwindling stocks, and a Russian export ban on diesel. Brent crude prices look set to test USD 100/bbl shortly but may be poised for a bit of a pullback after a period of very strong gains.
