New Zealand's export commodity prices finished off 2009 on a high note, with prices rising 2.6% in world price terms in December from November, the ANZ Commodity Price Index showed. A generally weaker New Zealand dollar during the month also saw prices rise 4.3% in New Zealand dollar terms in December.

The index showed export commodity prices rose by 30% in world price terms over 2009, led by dairy (up 50%), aluminium (47%) and timber (40%) prices. The overall index is only 6% off its record high set in July 2008, ANZ economist Steve Edwards said.

However, despite the good news to end the year there may be a slight fall back in dairy prices in January following more recent news. The average price of whole milk powder sold through Fonterra's on-line auction platform fell 7.1% in the January auction from December, and prices of dairy product exports from Australasia have also corrected downward by around 6% in the first weeks of 2010.

Here is the release from ANZ:

An upbeat tone to the end of last year. The ANZ Commodity Price Index ended last year with a 2.6 percent increase in December. The cumulative rise over the calendar year was 30 percent, with the largest annual increases in commodity prices recorded in dairy, aluminium and sawn timber (up 50, 47 and 40 percent, respectively). The overall index remains at lofty levels, and is only 6 percent away from its record high, recorded in July 2008.

Aluminium, forestry and dairy the largest rises. Six of the commodities recorded a price rise in December, five recorded reduced prices and two were unchanged. The largest individual rise in the month was a 12 percent lift in aluminium prices. Forestry prices also rose, with increased prices for wood pulp (4.1 percent), sawn timber and logs (both lifting 2.0 percent), Dairy prices moved up 3.0 percent in December and lamb was the last commodity to register a rise in price in the month, lifting 1.4 percent.

Wool and pelt prices dip. The largest price fall over December was jointly measured in wool and skins, which both eased 3.8 percent. Other price falls were measured in seafood (-1.2 percent), beef (-1.1 percent) and venison (-0.6 percent). The two fruit price series were unchanged in December.

International situation improving. As further confirmation that the global economy is on the mend, aluminium and sawn timber prices have both strengthen in nine of the last ten months. These two commodities are closely linked to industrial production. As such, they provide a timely gauge of the pulse of the global economy. Aluminium prices are now 65 percent above their February 2009 low and sawn timber prices are 56 percent above the level recorded in March. Dairy prices have increased for sixth consecutive month and are now 81 percent above their low in February last year.

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Kiwi dollar mildly weaker. The New Zealand dollar eased against the US dollar and Japanese yen, was unchanged with the Australian dollar and recorded small rises against the pound and euro. Overall the lower value of the Kiwi dollar helped lift the NZ dollar commodity price index by 4.3 percent last month.