Rising NZ dollar wipes out export gains

World prices for New Zealand's export commodities held their own last month but a resurgent kiwi dollar wiped out the gains.

ANZ Bank's commodity price index rose 0.4 per cent in August to be little changed on its level a year ago.

But when converted into New Zealand dollars returns slipped 1.8 per cent over the month, though they are still 10 per cent up on a year ago.

The largest increases in world prices were for apples ( 7.1 per cent), beef (5 per cent) and wood pulp (2.2 per cent), while skins fell 5.7 per cent, aluminium was off 2 per cent and dairy prices eased 0.7 per cent.

Skins are at a 6 1/2-year low, ANZ economist Steve Edwards said. Sheep-skin prices are about a third of their average value over the past five years, whereas cattle hides are 5 per cent higher.

European fashion houses were shunning leather and China had doubled production in the last decade, adversely affecting the earnings of New Zealand sheep farmers.