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Wool, Aluminium Lead ANZ Commodity Index Higher as Dairy Diverges
ANZ's commodity index rose 0.7% in May, with wool surging 75% y/y and aluminium up 49% as Middle East conflict tightens supply. Dairy diverges sharply.
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ANZ's World Commodity Price Index rose 0.7% in May from the prior month, with every commodity group posting gains, according to ANZ Research. The index is up 1.3% over the past year.
The New Zealand dollar-denominated index fell 0.3% in May, reflecting currency strength that offset some of the gains for exporters. The divergence between the world price index and the local-currency measure shows how much of the recent price increases are being absorbed by exchange rate movements rather than flowing through in full.
Wool has been the standout performer, rising 14.0% in May and 75.3% over the past year to its highest level since October 2011. Like beef and lamb, which are stabilising near record highs, wool is benefiting from strong demand and constrained supply.
Aluminium prices climbed 1.8% in May and are up 49.1% over the past year. The Middle East conflict is a direct driver. The region accounts for roughly 8 to 9% of global aluminium production. A large smelter was damaged in late March, and raw materials including alumina and bauxite have been unable to reach the Persian Gulf region. Production out of the area remains down 35% from pre-conflict levels. Shipping costs have also been affected, with higher fuel surcharges and increased congestion at some ports.
Dairy prices told a more mixed story. The index rose just 0.1% in May and sits 11.4% lower than a year earlier as global supply remains plentiful. Underneath that headline, components have diverged sharply. Skim milk powder prices are up 25.8% year on year even as butter prices have fallen 29.2% over the same period. The high butter prices that supported the broader dairy complex in 2024 and 2025 continue to unwind, driving the divergence.
The horticulture index rose 3.4% in May as New Zealand's main export produce began reaching overseas supermarket shelves, with early price signals in the new season described as encouraging. The forestry index rose 0.6%, with in-market log prices up 11.9% since the Middle East conflict began. Those gains have largely been absorbed by higher shipping costs rather than flowing through to New Zealand wharfgate prices.
ANZ's next Commodity Price Index update is scheduled for release on 6 July.