Radio New Zealand - Te Reo Irirangi o Aotearoa

Commodity price rises 'unsustainable'

Updated at 4:41 pm on 2 March 2011

Commodity prices are continuing to surge, but one economist thinks the increase is unsustainable.

The ANZ Commodity Price Index rose 2.7% in February to hit an all-time high, led by skins, then milk powder, sawn timber and venison.

When converted into New Zealand dollars, returns at the farmgate rose 2.9%, which reflects a slight fall in the dollar.

ANZ economist Steve Edwards says the index has risen a cumulative 21% in the past six months.

Mr Edwards says the benefits will flow through to the wider economy once the rural sector finishes paying off debt and starts spending again.

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