Insights 
VT 
In July, New Zealand’s ANZ Commodity Price Index decreased by 1.8% month-on-month, following a prior decline of 2.4%. The drop was attributed to lower dairy product prices.
Annually, the index increased by 10.7%, driven by higher dairy and red meat prices. A stronger currency contributed to a 1.2% month-on-month fall in the NZD Commodity Price Index.
Rising Global Shipping Prices
Additionally, ANZ reported that global shipping prices rose in July. Exporters anticipate these costs to decrease in the forthcoming months due to a fall in global demand.
We are seeing that commodity prices fell again in July, though at a slightly slower pace than the month before. The continued weakness is mainly due to lower prices for dairy products. This trend, combined with expectations of easing shipping costs due to reduced global demand, suggests a challenging environment for New Zealand’s exporters.
The latest Global Dairy Trade auction results from today, August 5th, 2025, confirm this view, with prices falling another 3.1%. This aligns with recent manufacturing data out of China, our largest trading partner, which showed an unexpected contraction and points to a broader slowdown. We also saw China’s official PMI fall to 49.2 last week, adding to concerns over demand for raw materials.
Given this outlook, traders should consider positioning for a weaker New Zealand dollar in the coming weeks. Shorting the NZD/USD through futures or buying put options could be viable, especially as the RBNZ may be forced to adopt a more dovish stance. This setup is reminiscent of the market action in late 2022, when a similar global growth scare pressured the Kiwi dollar significantly.
Expectations for the Reserve Bank of New Zealand
This leads us to believe the Reserve Bank of New Zealand will have little choice but to soften its tone at its upcoming meeting later this month. Markets are already reflecting this, with overnight index swaps now pricing in a 40% chance of an RBNZ rate cut by year-end, up from just 15% a month ago. Therefore, looking at derivatives that profit from falling short-term interest rates could also be a strategic move.
