Prices for New Zealand's export commodities continued to rise last month, defying a slowing world economy.
ANZ Bank's commodity price index rose 0.6 per cent in world price terms. A further weakening in the exchange rate boosted that to 3.5 per cent in New Zealand dollar terms, making 35.6 per cent for the year, an all-time high for the index.
Of the 17 commodities monitored, representing over 60 per cent of exports, seven recorded increases in world market prices last month and four held steady.
The biggest increases were recorded by apples (15.2 per cent) and sawn timber (13.2 per cent). But both are in weak markets and further gains are doubtful, ANZ chief economist Bernard Hodgetts says.
Others to gain were butter (4.1 per cent), casein (3.1 per cent), skins (2.6 per cent), wool (1.7 per cent) and venison (0.7 per cent).
Lamb prices fell 5.9 per cent, giving up some of the steep rise that followed the outbreak of foot and mouth disease in Britain.
"However, prices stabilised during the month and are expected to hold around current levels while restrictions on UK meat remain," Mr Hodgetts said.
World prices for aluminium, wood pulp, fish and milk powder also fell. Aluminium and pulp tended to be sensitive to the pace of word industrial activity, which had slowed in recent months, Mr Hodgetts said .
Slowing world growth would pull overall commodity prices lower over the next few months. "But even if they fall 10 to 15 per cent in NZ dollar terms, they would still be above their level for most of the past three or four years."
Commodities index at new high
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