KEY POINTS:
Another surge in dairy prices has helped drive the ANZ world commodity price index to a record high.
The index - a basket of New Zealand's main export commodities - rose 2.6 per cent last month to be 21.1 per cent ahead of May last year.
Dairy products, which make up a third of the index, rose 5.8 per cent. Over the past year they have climbed 74 per cent in world price terms and 49 per cent when translated into New Zealand dollars. But most of the other 12 commodities in the basket rose too last month.
ANZ chief economist Cameron Bagrie said high international commodity prices provided a massive income boost to the economy.
Unfortunately, the more impetus from that source, the greater the resistance the Reserve Bank needed to provide via interest rates to slow the economy down, he said.
The largest rise last month was the 6.9 per cent recorded by sawn timber.
Kiwifruit, with new season product reaching the European market, rose 3.2 per cent. Venison prices rose 2.2 per cent to a five-year high.
The only two commodities to fall were aluminium and lamb, by 0.8 and 0.9 per cent respectively. Aluminium has been at historically high levels, and the weakness in the lamb schedule was partly offset by a 3.9 per cent jump in wool prices.
Though it has soared over the past week, the kiwi dollar changed little against the currencies of our main trading partners last month, so the ANZ index rose 2.7 per cent in New Zealand dollar terms. It is 5.5 per cent ahead of where it was a year ago.
While the ANZ index is the highest it has been in its near-20 year history in world price terms, it has been higher in local currency terms.
Commodity index
* Overall index up 2.6 per cent
* Dairy products up 5.8 per cent
* Sawn timber up 6.9 per cent
* Lamb down 0.9 per cent
