New Zealand Prime Minister Jacinda Ardern announced Tuesday that the country will have a general election on September 19, 2020, yes seven months away. Expect a lot of electioneering in NZ. The election was due by November 21.
Arden made the announcement speaking to reporters at the year’s first post-cabinet press conference, Ardern said she believed the now-common practice of announcing elections early in the year was fair. The date means the New Zealand Parliament will sit for the last time on August 6 and will be officially dissolved on August 12.
“Until then the Government will continue on getting things done,” Ardern said, reiterating an earlier pledge to run a “positive, factual and robust election campaign”. Arden said.
Arden won the previous election on September 23, 2017. New Zealand First held the balance of power after the 2017 election and after parallel negotiations with Labour and National, chose to go with Labour, supported by the Greens, despite National being the largest party.
New Zealand First is understood to have favoured a November election date while Labour and the Greens favoured an earlier one that will make it easier to mobilise tertiary students
New Zealand has been concerned about inflation among other things. The ANZ commodity price index rose 4.3% in November, up sharply from a 1.2% gain in October. The rise was the larget gain since September 2016. Beef prices soared 19% m/m pressured by overseas supply constraints. All eyes will also be on the fallout with the coronavirus in China and the potential pressure on inflation for New Zealand.
In local currency terms the index lifted 3.5% m/m, constrained by a stronger New Zealand dollar. The NZD-TWI firmed 0.5% during November. ANZ Commodity Price Index
Shipping costs eased further with the Baltic Dry Index, a measure of global demand for shipping, falling 15% in November, continuing the downward trend. Global trade volumes have been negatively impacted by the trade tensions between China and the US. The decrease in general demand for global shipping is expected to mitigate some of the additional costs associated with the new legislation requiring ships to use higher-quality fuel that contains less sulphur and is therefore less damaging to the environment. This new rule takes effect in January, although some freight rates have already lifted in anticipation. ANZ Commodity Price Index and shipping costs
Dairy prices bounced 2.8% in November. Milk powders continue to display strength, with whole milk powder lifting 3.7% while skim milk powder gained 9.1% in November. SMP has gained 46% in the past year whereas butter and cheese prices are virtually unchanged. SMP prices have lifted over the past year since the excess stocks that previously overhung the market have disappeared.
The meat and fibre index increased 8.8% during November, and has gained 29% in the past year. Lamb prices lifted another 2.2%, while beef prices lifted a massive 19% in one just month. The sharp lift in beef prices was driven by China and the United States competing hard for the limited supply of manufactured beef available from New Zealand. The demand from China is driven by its shortage of protein associated with African swine fever decimating its pig population.
The horticulture index lifted 2.6% in November, adding to the 1.7% gain recorded in October. Kiwifruit prices gained 3.3% while returns from apples were stable. Kiwifruit returns have remained strong this year on a slightly smaller harvest volume. Fruit size was a tad smaller than the optimal size due to the hot summer resulting in fruit maturing earlier than normal.
The forestry price index lifted 2.9% in November following a 0.4% lift in October. Log prices lifted 4.3% during the month but are still 7% weaker than a year ago. The market has gradually recovered since the middle of the year, helped along by a small reduction in harvest volumes. More logs have also been sold in the domestic market, alleviating the pressure from weaker export markets.
Aluminium prices firmed 2.4% in November. Prices are now 9% weaker than a year ago. The future of aluminium production in New Zealand still remains uncertain. Rio Tinto, the owner of the aluminium smelter at Tiwai Point, is looking to negotiate a more favourable deal for the price it pays for electricity. At this point it remains uncertain if a concession will be granted but it seems in the interest of both parties to come to an agreement as due to lack of infrastructure the electricity used by the smelter is currently unable to be distributed to other regions. Sub group indices (world prices)
Source: ANZ, Bloomberg, Stats NZ
From The TradersCommunity News Desk