COVID-19 pandemic knocks down producers’ prices

As the COVID-19 global pandemic spread, falling prices for crude oil, milk, and meat led to a drop in producers’ costs of production in the June 2020 quarter, Stats NZ said today.

The costs producers paid fell 1.0 percent in the June 2020 quarter, although the prices they received for their goods and services only dipped 0.3 percent in the period.

Crude oil prices fell the most of any key commodity this quarter.

“As the pandemic spread in the first half of 2020, demand and prices for fuel slumped, with far fewer people travelling by air or road during lockdowns around the world,” business prices delivery manager Bryan Downes said.

“This meant much lower crude oil input costs for petroleum and coal product manufacturing in New Zealand, but a fall in demand also saw a fall in the output prices they received,” Mr Downes said.