New Zealand commodity prices rose in May marking their fifth consecutive rise, bolstered by cheese, skim milk powder and lamb. New Zealand dollar returns were helped by a decline in the currency against most major trading partners.

The ANZ commodity price index increased 1.5 per cent in May and is up 5.4 per cent from a year earlier In New Zealand dollar terms, the index gained 5 per cent in May and 6.8 per cent on the year.

Dairy prices rose 1.5 on the month in May, supported by slowing global production growth across major export regions and ongoing strength in global demand, said ANZ Bank New Zealand economists Miles Workman and Liz Kendall.

In Europe, production was dampened by cooler weather in February and March, which kept cows indoors longer and reduced pasture development.

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US milk supply has fallen slightly below trend growth while Southern Hemisphere supply has been growing steadily and demand has kept pace, they said.

Meat and fibre prices lifted 1.9 per cent as lamb prices rose 2.9 per cent on solid demand out of China and Europe. Wool prices are also up 5.4 per cent on the month while beef prices rose 1.1 per cent. Workman and Kendall noted New Zealand beef production is higher than anticipated due to the forced cull of dairy cows with Mycoplasma Bovis.

Horticulture product prices lifted 2.8 per cent on the month with apple prices up 8.2 per cent compared to April.

Forestry prices rose 0.3 per cent on the month and have lifted in each consecutive month from October 2016. Domestic and export log and lumber prices remain well above last year, with solid demand both domestically and from China although the economists note "upward momentum has flattened out recently."

Aluminium prices rose a further 3.2 per cent on the month after jumping 8.1 per cent in April on trade and geopolitical tensions.

Prices continued to hold at elevated levels on the back of US sanctions on Russia. Canada is also caught up in trade negotiations.

Add to that China's ongoing clampdown on excess production and environmental restrictions, as well as disruptions to supply from one of the world's largest alumina suppliers in Brazil "and the rollercoaster appears set to continue for some time yet," said Workman and Kendall.