By BRIAN FALLOW
Prices for New Zealand's commodity exports continued to climb last month, at least as measured by the shrinking yardstick of the kiwi dollar.
In world price terms, ANZ Bank's commodity index rose 0.4 per cent to its highest level for the past three years. It is now 10.5 per cent higher than October last year, although most of that increase had occurred by March.
The effect of higher world prices was dwarfed by the impact of the weak New Zealand dollar, which hit new lows last month.
In the course of October the dollar lost nine-tenths of a cent against the US dollar.
In kiwi dollar terms, a basket of New Zealand commodity exports cost 4.5 per cent more in October, lifting the annual increase to a hefty 35.3 per cent.
ANZ said the rise in the world price index was driven by across-the-board increases in dairy prices. Recent improvements in butter and cheese returns as a result of stronger demand in Asia and the Middle East had added momentum to dairy prices which had been rising since mid-1999, driven initially by milk powder.
Lamb prices continued to recover strongly and beef prices rose modestly. The most significant price fall last month was for aluminium, and wool prices also eased considerably after strong recent growth.
Prices for exports deceptive
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