In the first quarter of 2025, New Zealand’s manufacturing sales rose by 2.4%, improving from a previous increase of just 1.1%. In the last quarter, sales had actually dropped by 1.2%. However, the sales volume for dairy and meat products jumped by 4.1%. This new data shows that key manufacturing sectors are gaining strength. The shift from a decline to solid growth, especially in dairy and meat, indicates a positive trend in the primary industry. This is a notable change from last year when low global commodity demand and weak local orders hurt sales. Now, production is aligning more closely with typical seasonal patterns. The 2.4% increase in total manufacturing sales is more than twice the 1.1% gain from the previous quarter. Although overall figures can mask variations, the strong performance from food processing is clear. Patel highlighted that the dairy sector’s input procurement is typically reactive, which suggests that demand for feed, transport, and packaging will continue to rise into early winter. With this context, pricing trends are already starting to show the effects of increased production. Costs for raw materials, which have been stable over the past year, might soon influence wholesale and distribution prices. This affects how hedging strategies are viewed for commodity-linked investments. A key highlight is the 4.1% increase in dairy and meat sales volumes. These sectors, sensitive to global supply chains and local labor conditions, are bouncing back. Liu noted that better weather and stronger-than-expected export orders in February and March have contributed to this recovery. This factor is also impacting weekly volume contracts for related investments, as traders adjust their expectations for margins in the second quarter. Currently, the market seems less willing to accept sudden drops in agricultural outputs, as attitudes shift toward expecting moderate stability in volumes. This adjustment alters short-term risks for food and producer price-related investments. Since early April, order flow data shows a trend toward longer-term strategies. These changes call for careful attention to regional survey data, including upcoming PMIs and monthly production figures. The gap between weaker indicators and actual sales data is narrowing, allowing for more accurate modeling. However, short-term strategies may need to be flexible to account for possible volatility ahead of RBNZ updates or new export reports. Overall, the manufacturing output outlook is more stable than at the end of last year. Larger companies are aligning their second-half predictions with these strong first-quarter results. The current put/call ratios reflect a more cautious approach, but the shift away from declining sales is significant and should not be ignored.

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