New Zealand commodity prices snapped four months of gains as aluminium and whole milk powder fell, though a weaker kiwi dollar shielded local producers from the decline.

The ANZ Commodity Price Index fell 0.4 per cent to 326.7 in November and have gained about 21 per cent in the year. The index had been edging back toward its April record of 333.5 in the previous month.

Six of the 17 commodities tracked fell last month, seven rose and three were unchanged. Aluminium fell 4 per cent to a four-year low, whole milk powder dropped 3 per cent, butter was down 2 per cent, kiwifruit fell 1 per cent, and lumber and casein both fell 0.5 per cent.

Read more here:
Terms of trade at 40-year high
Dollar rises above 90 Aust cents


The price of pelts gained 5 per cent to a 16-year high, while skim milk powder rose 3 per cent, cheese was up 2 per cent, lamb, beef and wool rose 1.5 per cent, and logs gained 0.25 per cent.

Seafood, wood pulp and apples were unchanged this month.

Local producers were shielded from the drop in world prices because the New Zealand dollar weakened against the greenback and British pound, while gaining versus the Australian dollar and the yen. The overall impact was that the ANZ NZD Commodity Price Index rose 0.4 per cent, to be 6.9 per cent below the record high it reached in March 2011.

Senior economist at Westpac Bank, Michael Gordon, said that while the commodity price index was likely to remain elevated in the near term, he thought that world prices will come under downward pressure in 2014 as global supplies of commodities such as dairy increased.

"But while we expect prices to eventually ease from these exceptionally high levels, fundamental strength in demand for food from developing market economies should limit the downside."