High NZ dollar wipes gains in commodities

Export commodity prices rose an average 0.8 per cent in world price terms last month but the rising New Zealand dollar wiped out the gain and then some.

ANZ's commodity price index was 1.2 per cent higher than a year ago and 2.1 per cent higher than two years ago. But when converted to New Zealand dollars, prices were 2.4 per cent lower than in August, though still 9.5 per cent more than a year ago and at levels last seen in 2002. Eight commodities rose while five declined. The biggest gain was recorded by pelts, which rebounded 11.8 per cent from the six-year lows recorded in August.

Logs and venison were 3 per cent higher, and dairy products, meat and wool all rose around 2.2 per cent.

But beef prices fell 2 per cent on the month, seafood fell 1.7 per cent and sawn timber 1.3 per cent.

Aluminium prices rose 0.4 per cent and remain close to the 18-year highs recorded this year as speculators anticipated an increase in China's industrial production.

China's consumption of the metal is 22 per cent higher than a year ago.

However, world prices have slipped back as prospects for the world economy dim somewhat and more metal becomes available after a new smelter is built in Dubai.