ANZ RESEARCH · 2017. 11. 27. · ANZ Pacific Monthly / 11 February 2016 / 3 of 13 PACIFIC NEWS SAMOA An USD3.83m supplementary budget has been introduced by the Samoa Government

11 FEBRUARY 2016

INSIDE

Pacific News

Pacific region 2

Fiji 3

Cook Islands 3

Guam 3

Kiribati 3 New Caledonia 2

Samoa 3

American Samoa 3

Solomon Islands 3

Timor-Leste 3

Tonga 3

Vanuatu 4

Key Data Releases 5

Macro Forecasts 8

FX Market Developments 9 Commodity Market Developments 11

Important Notice 13

CONTRIBUTORS

[email protected] Glenn Maguire Chief Economist, South Asia, ASEAN & Pacific [email protected] Devika Mehndiratta Senior Economist, South Asia & ASEAN [email protected] Eugenia F. Victorino Economist, ASEAN & Pacific [email protected] Weiwen, Ng Economist, ASEAN & Pacific [email protected] Eugin Lee Analyst, ASEAN & Pacific [email protected] Daniel Hynes Commodity Strategist [email protected]

Follow us on Twitter @ANZ_Research

PACIFIC MONTHLY

ANZ RESEARCH

HIGHLIGHTS

The 2016-17 Pacific currency outlook appears to be a heady one for Pacific

currencies, with global and regional developments impacting various currency

pairs unevenly. In particular, amid an uneven global backdrop, the extent of

exposure of each economy’s trade, commodity and ‘services industry’ will

determine the trajectory of its currency performance.

In January, the contrary performance between the USD and commodity

currencies (AUD, NZD) has led to a divergence in their respective

individual Pacific crosses, to varying degrees.

Commodity prices remain under pressure as oversupply and fears of

stagnating demand permeate key commodity segments. In crude oil, we

still see the possibility of prices dipping into the mid USD20s per barrel

range in the coming months, with chances of coordinated production cuts

by OPEC and Russia highly unlikely.

Economic data in the aftermath of Cyclone Pam reveals uneven impacts

across the region. Vanuatu (which suffered the brunt of the cyclone)

continues to see deep cuts in tourism arrivals, with nationwide restoration

still underway. Interestingly, it seems that tourists are diverting their

itineraries to other less-affected Pacific Islands (rather than cancelling

plans altogether). The region (excluding Vanuatu) is seeing a marked

improvement in arrivals with the approach of the peak tourism season.

CHART OF THE MONTH – COULD OUTSOURCING EMERGE AS A NEW

DRIVER OF PACIFIC GROWTH?

A World Bank study suggests that the Pacific region (Fiji, Samoa and Tonga,

in particular) has the potential to attract offshoring, online outsourcing and

other IT-related industries. Arithmetically, this could add between 0.4 to 3.5%

to their GDP over the next five years, creating thousands of job opportunities

in the process. Indeed, Fiji is already showing promise as major companies

(including ANZ Pacific) set up their offshoring operations to its shores. The

report noted that the region’s young, cheap and tech-savvy population is a

key strength, and its best bet would be to provide ‘nearshoring’ services to

corporations in Australia and New Zealand.

OPTIMISTIC CASE ESTIMATES OF INDUSTRY IMPACTS IN THE NEXT 5 YEARS

Source: World Bank, ANZ Research

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ANZ Pacific Monthly / 11 February 2016 / 2 of 13

PACIFIC NEWS

Note to readers:

Due to resource constraints, we have

temporarily suspended PNG coverage as we

transition a new economist into covering this

important economy. We appreciate your

patience on this matter.

PACIFIC REGION

The United States government has officially

announced that it is pulling out of the

South Pacific Tuna Treaty, a move that will

take effect in 12 months, according to the

terms of the nearly 30-year-old deal with the

region. The cessation of the agreement is due to

a standoff between fishing licenses and treaty

payments. The move could strongly affect the

livelihoods of smaller Pacific islands that are

dependent on the tuna trade. (ABC news,

Marianas Variety)

A World Bank report said that up to 20,000

jobs could be created in the Pacific through

IT-enabled outsourcing industries. The

study noted that Fiji, Samoa and Tonga,

especially, have significant competitive

advantages, such as a young qualified labour

market, improving Internet infrastructure, and

strong political support. (Radio New Zealand

International)

FIJI

Fiji’s sugar cane farmers will be receiving

an advance payment of FJD2/t to cope with

drought, announced Prime Minister Voreqe

Bainimarama. The payment will then be

deducted from the Q3 and Q4 quarter payments.

(Fiji Times Online)

Fiji airways is operating four direct flights

from China to Fiji, in a move to bring in

tourism flows boosted by the Chinese New Year

holidays. The chartered flights are expected to

bring in 1,200 tourists amid a seasonal low point

in the country’s tourism industry.

(Fiji Times Online)

A new Tuvatu mining lease awarded to

Canadian Mining Company Lion One Metals

is expected to provide 200 employment

opportunities, according to Steven Mann, who

is in charge of the Tuvatu Gold Mine project. The

new mine is projected to generate USD414m of

revenue when it goes into operation.

(Fiji Times Online)

Fiji will host the 25th Asia-Pacific

Parliamentary Forum in January 2017,

according to an announcement made by the

Forum’s executive committee. (Fijilive)

COOK ISLANDS

The Cook Islands Tourism Corporation is

expecting strong tourism growth in 2016,

with the introduction of new seasonal flights and

intensive marketing and branding efforts.

(Cook Islands News)

The Cook Islands could be among the

richest countries in the world if its

resources are ‘wisely and sustainably

harvested’, according to the Prime Minister,

Henry Puna. The Cook Islands has the 20th

largest exclusive economic zone in the world and

vast quantities of fisheries and seabed minerals.

(Cook Islands News)

GUAM

Guam’s economy could grow 3-4% this

year, benefiting from higher military

spending and a surge in tourism arrivals,

according to the Chief Economist of the Bank of

Guam, Joseph Bradley, who noted that if growth

remains as envisaged, Guam should be well

positioned for another minimum wage increase.

(Pacific Daily News)

Guam’s tourist arrivals reached a record

1.4m last year, owing to a boost in South

Korean and Chinese tourists, according to the

numbers from Guam Visitors Bureau. Japanese

tourists, which are traditionally Guam’s largest

visitor market, have declined due a weaker yen.

(Pacific Daily News)

KIRIBATI

Kiribati’s Presidential election will likely be

held in March this year, according to the

Electoral Commission. The outgoing President

Anote Tong, is bowing out of politics after having

served the maximum of three terms.

(Radio New Zealand International)

NEW CALEDONIA

The New Caledonian government has

authorised nickel exports to Japan and

Australia in a bid to combat industry wide

losses. (Radio New Zealand International)

Lower planned investment and possible job

cuts are a new reality in New Caledonia’s

SLN nickel company, according to the Head of

SLN, Jerome Fabre. Mr Fabre expects that

suppressed nickel prices (which have already

slumped 40%) will persist till the end of 2017.


The Congress of New Caledonia has

approved the budget for 2016, with the

expectation that growth would weaken to

0.6%. (Radio New Zealand International)


PACIFIC NEWS

SAMOA

An USD3.83m supplementary budget has

been introduced by the Samoa Government. In

summary, the funds are allocated to develop

woman in agriculture, supplement the overseas

disease scheme, support the Samoa Broadband

Highway Project and other education needs.

(Samoa Observer)

Talofa Airways is set to launch from Samoa

in April, serving the region with priority

given to in-demand routes between Samoa

and American Samoa. Currently, Locally-

owned Talofa is in process of acquiring two Twin

Commander aeroplanes and would likely

compete with regional air service providers

Polynesian Airlines and Samoa Air.

(Samoa Observer)

Affordable, high speed satellite internet

would soon be a reality in Samoa, following

multi-transponder contract signed between

Bluesky Pacific Group, the local leading

telecommunications provider and Satellite

operators A.B.S. The multi-year capacity deal

will offer expanded satellite connectivity services

across the Samoan islands and the Pacific.

(Samoa Observer)

The US CDC health agency declared a Zika

virus travel alert to Samoa, prompting a

reassurance announcement from the Samoan

government. The Ministry of Health had confirmed

three cases since last year although more recent

blood samples tests have returned negative.

Measures are currently put in place to control the

disease. Caretaker Prime Minister Tuila’epa

Sa’ilele Malielegaoi said that reports of Zika in

Samoa will have an adverse impact on the

tourism industry. (Radio New Zealand)

AMERICAN SAMOA

The US Interior has released the final

USD18.3m in grant assistance for fiscal

2016 to American Samoa. Funds would be

used to support the daily operations of the

American Samoa government. (Marianas Variety)

American Samoa is becoming a new Zika

Hotspot in the Pacific, with local doctors

reportedly diagnosing an average of six cases a

day. The Health Department has recorded 25

suspected cases although lab testing delays

have yet to confirm those cases. Nonetheless,

the US CDC health agency has announced a

travel alert to American Samoa. (Radio New

Zealand, US Centers for Disease Control and

Prevention)

SOLOMON ISLANDS

Solomon Islands’ economy is expected to

expand by 3.5% over the next year,

according to Moody’s. However, the uncertain

outlook of the logging industry, underdeveloped

state institutions and frequently changing

government could present downside risk to that

forecast. (Radio New Zealand International)

TIMOR-LESTE

The Export Import Bank of China has

granted a soft loan of USD50m to Timor-

Leste for Dili sewage system improvements,

said the Timorese Ministry of Finance. The

Finance Ministry described the loan terms as

‘favourable’ and divulged that the deal includes

a ‘donation equivalent to 27.76% of the loan

value’. (Macauhub)

French group Bolloré Transport & Logistics

has been appointed to build and manage

the deep-water port of Dili under a

partnership with the government, according

to a press release statement. The partnership

will be in place for 30 years and is expected to

generate 350 direct job opportunities.

(Macauhub)

TONGA

Tonga Airports (TAL) has declared a

TOP1.3m dividend payable to the

government for the financial year 2014-15.

The dividend payment represents 75% of TAL’s

profit after tax in a year where revenue

exceeded TOP10m mark for the first time.

(Matangi Tonga Online)

Vava’u will receive two new direct flights

from Nadi, Fiji starting 2 April this year,

according to an announcement by Fiji Airways.

These flights should facilitate international

tourism flows, especially for North American

tourists who prefer to transit in Nadi. Vava’u is a

popular tourist destination famous for its

Humpback Whales tourism activities. (Matangi

Tonga Online)

Australia has pledged up to $500,000 in aid

to Tonga to help combat the spread of the

Zika virus after an outbreak was declared last

week raised concerns in the region. The initial

focus on strengthening the fight against the

mosquito-borne virus would be in Tonga, Pacific

Minister Steven Ciobo said in a statement. He

said Australia would work with World Health

Organisation (WHO) officials and the Tongan

government to control the mosquito population

and increase access to testing.


PACIFIC NEWS

Tonga declared an outbreak of the Zika

virus last week, after five cases were confirmed

and 259 suspected. The US CDC health

agency has issued a travel alert to Tonga.

(ABC News, US Centers for Disease Control and

Prevention)

VANUATU

Vanuatu recorded its third consecutive and

largest ever fiscal surplus last year,

according to Vanuatu’s caretaker Prime Minister

Sato Kilman. PM Kilman that the surplus of over

USD8m is extremely commendable in the face

of challenges caused by Tropical Cyclone Pam.


Air New Zealand (and subsequently,

Qantas and Virgin Australia) have decided

to suspend flights to Port Vila on concerns

about runway safety, according to Vanuatu’s

Civil Aviation Authority which conceded that the

runway may not be up to par. The suspension

has reduced tourism arrivals from Australia and

New Zealand significantly. Nonetheless, regional

airlines to other Pacific Islands are still

operating amid ongoing discussions to reinstate

flight services. (Radio New Zealand)

Vanuatu’s tourism is starting to return to

Pre-Cyclone Pam levels, with tourism veering

towards northern islands such as Espiritu Santo,

that were not affected by Tropical Cyclone Pam.


17 parties and 8 independent members

have been elected into the 52-seat

Parliament, following the country’s Jan’16 snap

elections. A Memorandum of Agreement has

been signed by more than two-third of

Vanuatu’s 52 MPs to commit to forming a

new coalition government. The new

government is expected to formally take shape

next week when Parliament sits on 11

February to elect a prime minister.

(Radio New Zealand International, Radio

Australia)


KEY DATA RELEASES

New data are shaded.

For a more in-depth view on the data flow, please refer to our August Pacific Quarterly here.

INFLATION LATEST PREVIOUS

Fiji CPI (y/y) Nov-15 1.8% 1.4%

Samoa CPI (y/y) Dec-15 -2.3% -0.5%

Solomon Is. CPI (y/y, 3mma) Oct-15 1.2% 0.1%

Timor-Leste CPI (y/y) Dec-15 -0.6% -0.1%

Tonga CPI (y/y) Nov-15 -1.9% -1.3%

Vanuatu CPI (y/y) Q3-15 -3.5% 5.7%

Source: The respective central banks and national statistics offices. *Due to natural disaster distortion.

TRADE LATEST PREVIOUS

Fiji Exports (y/y, ytd)** June-15

-10.1% -6.2%

Fiji Imports (y/y, ytd)** June-15

-13 -13

-9.7% -9.7%

Samoa Exports (y/y) Oct-15 26.9% 76.9%

Samoa Imports (y/y) Oct-15 -9.8% 4.3%

Solomon Is. Exports (y/y) Nov-15 29.2% -10.4% 2 Solomon Is. Imports (y/y) Nov-15 9.0% -5.7%

Timor-Leste Exports (y/y) Nov-15

2.0% 148%

Timor-Leste Imports (y/y) Nov-15

-13 -13

0.5% 43%

Tonga Exports (y/y) Nov-15 6.0% -8.7%

Tonga Imports (y/y) Nov-15 11.1% 13.4%

Vanuatu Exports (y/y) * Jul-15 -54% 54.7%

Vanuatu Imports (y/y) * Jul-15 20.2% 93.4%

Source: The respective central banks and national statistics offices. *Due to natural disaster distortion. ** Excld Aircraft

POLICY RATES LATEST PREVIOUS

Fiji Overnight Policy Rate Sept-15 0.50% 0.50%

PNG Kina Facility Rate Feb-16 6.25% 6.25%

Samoa Official Interest Rate Nov-15 0.15% 0.15%

Tonga Wtd Ave Lending Rate Nov-15 8.07% 8.09%

Vanuatu Rediscount Rate May-15 5.25% 5.25%

Source: The respective central banks and national statistics offices.

TOURIST REMITTANCES LATEST PREVIOUS

Fiji Visitor Arrivals (y/y, ytd) Nov-15 8.8% 8.7%

Samoa Tourist Arrivals (y/y) Nov-15 -3.9% 15.5%

Samoa Remittances (y/y) Nov-15 -11% %

3.3%

Tonga Tourist Receipts (y/y) Nov-15 12.1% 9.5%

Tonga Remittances (y/y) Nov-15 13.1% 10.7%

Vanuatu Tourist Air Arrivals (y/y) Q3-15 -20.3% -41%

Timor-Leste Visitor Arrivals at Dili Airport Q3-15 2.5% 5.2%


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KEY DATA RELEASES

MONETARY LATEST PREVIOUS

Fiji M3 - Money Supply (y/y) Oct-15 15.3% 12.9%

Fiji Domestic Credit (y/y) Oct-15 12.8% 12.1%

Samoa M2 - Money Supply (y/y) Nov-15 10% 9.9%

Samoa Public & Private Sector Credit (y/y) Nov-15 6% 8.11%

Solomon Is. Private Sector Credit, y/y Nov-15 16.7% %

18.8%

Solomon Is. M3 - Money Supply (y/y) Nov-15 11.3% 9.0% % Timor-Leste M2 - Money Supply (y/y) Dec-15 7.1% 8.3%

Timor-Leste Private Sector Credit (y/y) Q4-15 7.9% 10.9%

Tonga Private Sector Credit (y/y) Nov-15 12.8% 14.4%

Tonga M3 - Money Supply (y/y) Nov-15 13.4% 15.0%

Vanuatu M2 - Money Supply (y/y) Q3-15 11.4% 10.2%


RESERVES LATEST PREVIOUS IMPORT COVER

(MONTHS)

Fiji Foreign Reserves (USDm) Nov-15 902.4 915.9 5.9

Samoa Foreign Reserves (USDm) Nov-15 122.2 126.5 5.4

Solomon Is. Foreign Reserves (USDm) Nov-15 500 497 10.0

Timor-Leste* Foreign Reserves (USDm) Nov-15 16,650 16,770 n/a

Tonga Foreign Reserves (USDm) Dec-15

147.4 142.8 9.6

Vanuatu Foreign Reserves (USDm) Q3-15 261 221 7.6

* Petroleum Fund Balance. **ANZ’s estimate. Source: The respective central banks and national statistics offices.


MACRO FORECASTS

REAL GDP GROWTH (%) NOMINAL GDP (USDbn)

2013 2014F 2015F 2016F 2013E 2014F 2015F 2016F

Fiji 4.6 4.5 4.0 3.0 Fiji 3.4 3.7 3.9 4.1

Samoa** 0.0 1.9 2.4 2.5 Samoa** 0.8 0.8 0.8 0.9

Solomon Is. 3.2 1.0 3.3 3.0 Solomon Is. 1.1 1.2 1.3 1.4

Timor-Leste* 9.5 7.0 6.2 6.0 Timor-Leste* 1.4 1.5 1.7 1.8

Tonga -3.0 1.9 2.5 2.8 Tonga 0.5 0.5 0.5 0.5

Vanuatu 3.2 3.6 -0.5 4.0 Vanuatu 0.8 0.9 0.9 0.9

INFLATION (%) FISCAL BALANCE (% of GDP)

2013 2014F 2015F 2016F 2013E 2014F 2015F 2016F

Fiji 2.9 0.5 3.0 3.0 Fiji -2.8 -2.1 -2.7 -1.7

Samoa** -0.2 -1.2# 2.0 2.3 Samoa** -6.1 -4.8 -4.2 -3.9

Solomon Is. 5.8 4.8 1.8 3.0 Solomon Is. 2.3 -1.3 -3.5 3.0

Timor-Leste 9.7 1.5 3.1 3.3 Timor-Leste 39.7 21.0 22.5 19.0

Tonga 1.0 1.5 1.9 2.5 Tonga -1.1 -0.2 -0.1 -0.2

Vanuatu 1.4 1.0 3.0 3.0 Vanuatu 0.7 -2.1 -3.0 -3.0

CURRENT ACCOUNT BALANCE (% OF GDP) FOREIGN EXCHANGE RESERVES (USDm)

2013E 2014F 2015F 2016F 2013E 2014F 2015F 2016F

Fiji -20.7 -10.0 -8.7 -8.9 Fiji 755 750 764 780

Samoa** -2.0 -5.4 -5.2 -5.0 Samoa 137 155# 156 160

Solomon Is. -4.0 -6.0 -5.1 -7.5 Solomon Is. 515 530 550 550

Timor-Leste* 45 22 12 12 Timor-Leste 15.0bn 16.5bn 18.2bn 19.0bn

Tonga -6.0 -4.8 -4.8 -5.0 Tonga 140 138 140 140

Vanuatu -6.2 -6.0 -7.0 -7.0 Vanuatu 189 212 228 228

Source:

Fiji: Reserve Bank of Fiji, ADB, IMF, ANZ Research

Samoa: IMF, ADB, ANZ Research

Solomon Islands: Central Bank of Solomon Islands, IMF, ANZ Research

Timor-Leste: IMF, ANZ Research

Tonga: Reserve Bank of Tonga, IMF, ANZ Research

Vanuatu: Reserve Bank of Vanuatu, IMF, ANZ Research

* Real and nominal GDP pertain to non-oil GDP; C/A balance as % of non-oil GDP.

** Samoa’s fiscal year runs from July–June.

^Actual figure.


FX MARKET DEVELOPMENTS

The run of US data has been soft of late and calls for rate hikes have thus eased significantly. Pacific currencies

have also reacted accordingly, with depreciation against the USD slowing down in the past 30 days. However,

commodity currencies (AUD and NZD) have remained suppressed, given the recent fixation towards low

commodity prices and the stability of Chinese assets. For the Pacific economies, this has led to a divergence in

the USD/Pacific against the AUD/Pacific and the NZD/Pacific crosses to varying degrees. For a detailed update

on our Pacific FX outlook, please read our note.

FIJI – FJD CROSS RATES

SOLOMON ISLANDS – SBD CROSS RATES

VANUATU – VUV CROSS RATES

TONGA – TOP CROSS RATES

SAMOA – WST CROSS RATES

Updated as of 18 January 2016. Source: Bloomberg, ANZ Research

0.60

0.63

0.66

0.69

0.72

0.75

0.45

0.49

0.53

0.57

0.61

0.65

0.69

Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16

FJD-USD FJD-AUD FJD-NZD (RHS) FJD-SGD (RHS)

4.7

4.9

5.1

5.3

5.5

5.7

5.9

6.1

6.3

6.5

5.4

5.8

6.2

6.6

7.0

7.4

7.8

8.2

Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16USD-SBD AUD-SBD

NZD-SBD (RHS) SGD-SBD (RHS)

66

68

70

72

74

76

78

80

82

84

86

72

76

80

84

88

92

96

100

104

108

112

116


USD-VUV AUD-VUV NZD-VUV (RHS) SGD-VUV (RHS)

1.28

1.31

1.34

1.37

1.40

1.43

1.46

1.49

1.52

1.55

1.58

1.61

1.441.501.561.621.681.741.801.861.921.982.042.102.162.22


USD-TOP AUD-TOP NZD-TOP (RHS) SGD-TOP (RHS)

0.49

0.52

0.55

0.58

0.61

0.64

0.67

0.70

0.73

0.76

0.79

0.82

0.340.360.380.400.420.440.460.480.500.520.540.560.58


WST-USD WST-AUD WST-NZD (RHS) WST-SGD (RHS)

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FX MARKET DEVELOPMENTS

For an in-depth currency forecast commentary, please contact your ANZ Representative.

Note: The source of FX data is Bloomberg and the respective central banks in the Pacific. As the currencies are illiquid with wide bid/offer spreads, the rates published are only indicative.

* Overnight policy rate.

^ Discount rate.

Updated as of 25 January 2016.


COMMODITY MARKET DEVELOPMENTS

FIGURE 1. COMMODITY PRICE INDICES

Commodity prices remain under pressure as

oversupply and fears about stagnating demand permeate key commodity segments. In crude oil, we still see a possibility of prices dipping into the mid-USD20s/bbl in the coming months, with chances of coordinated production cuts by OPEC and Russia highly unlikely.

Oil prices fell 15% during the first three weeks of January, before finding some support late in the month from hopes of supply cuts. A meeting between Russia and OPEC was touted, with Russia suggesting it could join a potential coordinated approach on oil output. A 5%

production cut had been raised at the last OPEC meeting.

We believe the likelihood of such action is extremely low. Russia is heavily reliant on oil, which contributes to 40% of budget revenue. Russia is also on track to reach a record high 10.9Mb/d in January and thus is unlikely to cut production. Meanwhile OPEC remains steadfast in its strategy of maintaining current output levels. There are

also political barriers in place, with Saudi Arabia and Russia currently backing opposite sides in the Syrian conflict. We still see the possibility of prices dipping into the mid USD20s per barrel in the coming months. With Iran now able to boost exports and inventories continuing to build in the US, fundamentals are likely to

get worse before they get better.

Palm oil prices defied the broader sell-off in commodity markets in January. Palm oil prices in US dollar terms rallied 6% m/m, breaking key resistance levels and hitting a six month high. Supporting prices in the second

half of January was the release of key statistics by the Malaysian Palm Oil Board (MPOB),showing a 10% fall in the country’s palm oil stocks as Crude Palm oil (CPO) production fell 15% m/m. The El Nino, which caused dryness in South East Asia. is expected to continue to reduce palm oil yields over the next six months in both Indonesia and Malaysia and push prices higher still.

Global palm oil production is only expected to grow marginally in 2016, a sharp contrast to the last five years when global palm oil production grew at an average rate of 3 million tonnes pa.

Sugar prices fell in late January, breaking key support levels established in the last quarter. Prices lacked any impetus to rally, given that Brazil’s main cane producing region had finished harvesting and rainfall in the country’s centre south region has been above average – setting the stage for another large cane crop in 2016.

Near term supplies are also ample in other key exporting

countries such as Thailand, where cane mills have operating at high processing capacity for three weeks, allowing an early season shortfall in production to be narrowed considerably.



*Fish prices are a proxy derived from shrimp prices.

Source: Bloomberg, World Bank, Haver, ANZ Research

*Updated as of 18 January 2016. Source: Bloomberg, ANZ Research

30

50

70

90

110

130

150

Jan 13 Jan 14 Jan 15 Jan 16

(Avera

ge 2

013=

100)

Oil (Tapis) Gold Copper Silver

60

80

100

120

140

160

180

200

220


(Avera

ge 2

013=

100)

Coconut oil Palm oil Copra

60

80

100

120

140

160

180


(Avera

ge 2

013=

100)

Sugar Cocoa Coffee Rice Fish*

Price

changes*

Oil

(tapis)Gold Silver Copper Coc. oil

Palm

oilSugar Coffee Cocoa Rice Copra Fish

M/M 0.7% 3.4% 5.8% 0.6% 5.1% 0.3% 29.6% 11.0% -5.8% 5.0% -7.6% -8.3%

3M/3M -16.8% 3.8% 7.8% -2.9% -1.0% -3.3% 12.1% -0.9% -6.8% -7.7% 5.7% -7.7%

Y/Y -44.6% -4.9% -7.1% -20.7% 0.7% -5.6% -13.3% -40.3% 0.0% -13.0% -29.1% -19.5%


COMMODITY MARKET DEVELOPMENTS

ANZ PACIFIC COMMODITY PRICE INDEX (PCPI)

The commodity slump continues to adversely affect

Pacific economies, with import and export indices

registering double digit y/y declines. On a sequential

basis, export prices posted slight gains on the back of

signs of stabilisation in agricultural prices. In

contrast, the import price indices continue to slide as

global energy prices are still struggling to find a floor.

Over the near term, ANZ commodity analysts expect

current trends to persist.

FIJI – COMMODITY PRICE INDICES

TIMOR-LESTE – COMMODITY PRICE INDICES

SAMOA – COMMODITY PRICE INDICES

SOLOMON ISLANDS – COMMODITY PRICE INDICES

TONGA – COMMODITY PRICE INDICES

Source: World Bank, Haver, ANZ Research

VANUATU –COMMODITY PRICE INDICES

Fiji Timor Samoa Sol. Tonga Van.

Export, y/y -23.4 -37.8 -30.6 -11.7 -23.6 -19.8

Export, m/m 0.3 -13.8 1.4 0.5 0.0 2.5

Import, y/y -33.5 -22.4 -26.3 -32.9 -17.9 -25.5

Import, m/m -7.7 -2.8 -5.4 -8.4 -1.3 -4.1

ANZ Pacific Commodity Price Index (ANZ PCPI) Dec 2015

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Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15

2010 =

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2010 =

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Terms of Trade (RHS) Exports Imports

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2010 =

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2010 =

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2010 =

1002

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2010 =

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2010 =

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2010 =

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2010 =

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2010 =

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2010 =

100


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