The ANZ Commodity Price Index rose 0.7% m/m in December, largely due to the continuing comeback story of dairy prices over the second half of 2016. The December rise in the index was the eighth in a row, driving it 19% higher over the course of 2016.

The NZD Commodity Price Index posted a 2.0% m/m lift in December.This was the fifth month-on-month rise in a row and the fourth monthly gain above 2%. The NZD's continued descent against the USD and GBP in December was the key helping hand. The NZD TWI actually rose 0.1% m/m. however, implying little exporter relief elsewhere.

Non-dairy commodity prices were the disappointment, falling 1.9% m/m. Only 3 of the 12 non-dairy commodities in the index rose in December, with falls centred mainly in the meat and fibre group. However, many sectors saw price improvement throughout the course of 2016 (total non-dairy +7% y/y), though NZD moves continued to weigh on local returns in many cases.