The country's main commodity exports remain at record highs on the back of strong dairy and aluminium prices, while a softer New Zealand dollar is boosting returns to producers.
File image. Photo: 123RF
ANZ Bank's latest commodity price index rose 1 percent last month to return to its record breaking run of the past year, to be nearly 20 percent higher than a year ago.
ANZ agricultural economist Susan Kilsby said a 2.5 percent rise in dairy prices had driven the overall gain as constrained supply could not match demand.
"Markets [have] become increasingly aware that there is not a lot of extra milk being produced anywhere in the world. Output in New Zealand slowed considerably in December and this trend is expected to persist through most of the second half of the season."
The gains for dairy were supported by a 10.7 percent rise in aluminium prices, as global supplies shrank with the fall in Chinese production and rising costs in Europe.
Horticulture was also stronger as new season fruit was starting to hit markets, which offset a dip for meat and wool, and a flat forestry sector, Kilsby said.
Shipping costs remained high because of port delays largely in China, she said.
"Port throughput has slowed as temporary shutdowns at some Chinese ports due to fears of Covid outbreaks, which potentially could disrupt the Beijing Winter Olympics."
The softer New Zealand dollar, which has fallen to 19-month lows against those of our major trading partners, was boosting the returns to New Zealand producers.
However, despite the strong export performance New Zealand's trade deficit rose hit a 15 year in December of $6.8 billion, as surging imports outpaced export growth.