Global trade war 'bad news for NZ'
A global trade war beckons, which is bad news for a small open economy like New Zealand, warns Mark Smith ASB senior economist.
Rural economist Nathan Penny said he was surprised that Fonterra maintained its milk price forecast at $6/kgMS last week.
Penny says all the seven main products that ASB monitors posted falls. Overall prices now stand 42.2% lower than a year ago
SMP, BMP and casein posted the biggest falls, dropping 9.5%, 12.9% and 14.3% respectively. Meanwhile, WMP fell 4.3% and the other products recorded falls in the 5% to 6% range.
Russian import ban may be putting more downward price pressure on products with strong European supply (e.g. SMP) relative to NZ-dominated products (WMP), he says.
Higher prices for later-dated contracts still hint at support for prices later in the season, but at the expense of short-term weakness.
