Business

Commodity prices may not be sustained - economist

08:04 am on 2 December 2010

ANZ economist Steve Edwards believes record high commodity prices may be unsustainable.

The latest ANZ Commodity Price Index rose 4.5% in November to an all time high. Pelts were up by a third and logs and lamb both climbed 6%.

Mr Edwards says prices are being driven by strong demand from Europe and Asia.

But he warns they are extremely high and it's likely they'll fall again to the levels of years ago.

Once the high New Zealand dollar is taken into account, Mr Edwards says commodity prices rose by only 1.4%, which is just below the peak recorded six months ago.

Commodities account for 60% of New Zealand's annual export earnings of $31 billion.