Rising dairy prices continue to underpin gains in the ANZ Commodity Price Index, which has recorded its seventh straight monthly gain last month.
The index gained 4.6 per cent in October, led by an 8.3 per cent increase in dairy prices, as 11 of the 13 commodities tracked rose.
Dairy prices have recovered strongly as buyers restock depleted inventories, as witnessed by the 65 per cent surge in the price of milk powder on Fonterra's online auction website, globalDairyTrade.
Fonterra will hold its next auction tomorrow.
"You'd expect dairy prices to fall after they risen over 65 per cent since July, but anecdotally, what we're hearing suggests prices are still pretty firm," said Philip Borkin, economist at ANZ National Bank.
Commodities have bounced back from their lows in February, with the ANZ index rising 24 per cent over this period, but are still well down from the highs achieved in 2007.
The gains in international prices have somewhat offset a soaring kiwi dollar, which is up more than 45 per cent from its sub-50 US cents low in March.
The currency's continued strength in October largely wiped out the increase, expressed in New Zealand dollars, with kiwi-denominated commodity index easing 0.4 per cent last month.
Sawn timber rose 6.1 per cent on a global price basis, and wood pulp prices advanced 4.2 per cent. Wool prices increased 7.1 per cent and the price of skins gained 3.5 per cent. Beef prices slipped 3.9 per cent and apples declined 1.7 per cent over the period.
