Australia commodity price index hits new high

SYDNEY: The Reserve Bank of Australia's (RBA) index of commodity prices jumped a further 2.2 percent in February, from January, to reach a fresh record high as rising iron ore and coal prices augured well for export earnings.

That followed an upwardly revised increase of 5.3 percent in January.

The index was up a massive 48 percent in special drawing right (SDR) terms, compared to February last year. The index reading of 136.0 far surpassed the 2008 peak of 119.5.

In Australian dollar terms the index rose by 1.9 percent in February and was up 32 percent for the year.

The index also hit a record high in U.S. dollar terms, to be up 50 percent on February last year.

The largest contributor to the rise in February were increases in the estimated prices of iron ore and coal, reflecting some further adjustment towards the higher contract prices in the March quarter.

Increases in the prices of crude oil and wheat also contributed to the rise, while beef & veal prices fell.

Much of the increase for the past year or more reflected huge price rises for iron ore and coal, Australia's two biggest export earners. That has boosted Australia's terms of trade, lifting profits, investment, employment and tax receipts.