May 17 (Bloomberg) -- Prices paid by New Zealand farms, factories and other producers for commodities and services rose at the slowest pace in more than two years, a sign wholesale inflation was contained at the start of the year.
Producer input prices gained 0.3 percent in the first quarter from the three months through December, Statistics New Zealand said in Wellington today. That’s the smallest increase since a decline in the third quarter of 2009. Input prices rose 2.3 percent from a year earlier.
Prices paid by electricity retailers increased 8.4 percent as lower flows into hydro storage lakes pushed up wholesale power prices, today’s report showed. A shortage of lambs increased the prices paid by sheep farmers, and food manufacturers paid less for milk and sheep, while other processors paid less for wool and wood, the agency said.
Producer output prices, which are paid to factories, farms and other producers, fell for the first time since the fourth quarter of 2009, declining 0.l percent, the agency said. From a year earlier, output prices increased 1.6 percent.
The New Zealand currency rose 6.8 percent against the U.S. dollar and also advanced against the yen, pound, euro and the Australian dollar during the period, the statistics agency said. The price index is calculated based on exchange rates as of Feb. 15 compared with Nov. 15.
Food manufacturers were paid less as global prices fell and the currency gained, the agency said. Forest owners received less for logs and pulp, and paper manufacturers saw lower prices for their exports, it said.
Payments to farmers for their sheep, wool and milk also declined, today’s report showed. Prices received by dairy farmers fell 2.2 percent from the fourth quarter after Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, reduced its payments to suppliers, citing falling world prices and a rising currency.
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