KEY POINTS:
New Zealand commodity prices hit a record high last month thanks to a strong rise in international dairy prices brought on by the Australian drought.
The ANZ Commodity Price Index rose 2.2 per cent and dairy prices - which make up a third of the index - rose 8.9 per cent.
"The jump is a consequence of the Australian drought restricting supply of dairy products to the global market," said ANZ economist Steve Edwards. "Exacerbating this price rise is the news that European countries are to gradually phase out export subsidies over the next nine years."
In local currency terms, commodity prices rose just 1.3 per cent in November because of gains in the kiwi. This highlighted the "significant influence strong international commodity prices were having in buffering pockets of the export industry", said Edwards.
Since 2005, international dairy prices have been steadily declining until recently when the global index surged to an 11-year high.
In New Zealand dollar terms, dairy prices also rose, but this increase was dampened by a rise in the New Zealand dollar. On the flip side, sawn timber fell 7.7 per cent and lamb went down 2.7 per cent.
On the up
* NZ commodity prices last month:
* In world terms, up 2.2 per cent.
* In New Zealand dollars, up 1.3 per cent.
