Index of Commodity Prices December 2010

Preliminary estimates for December indicate that the index rose by 3.2 per cent (on a monthly average basis) in SDR terms, after rising by 1.2 per cent in November (revised). The largest contributor to the rise in December was an increase in the estimated price of iron ore, with strong Chinese demand and weak Indian export supply supporting higher spot prices. Increases in the price of wheat and the estimated price of coal also contributed to the rise, partly reflecting recent unfavourable weather conditions in Australia. The prices of gold and oil also rose notably. In Australian dollar terms, the index rose by 1.2 per cent in December (consistent with the appreciation of the exchange rate).

Over the past year, the index has risen by 48 per cent in SDR terms. Much of this rise has been due to increases in iron ore, coking coal and thermal coal export prices. With the appreciation of the exchange rate over the year, the index rose by 30 per cent in Australian dollar terms.

As indicated in previous releases, preliminary estimates for iron ore, coking coal and thermal coal export prices are being used for recent months, based on market information.

For further details regarding the construction of the index, please refer to ‘Updating the RBA's Index of Commodity Prices’ in the October 2009 issue of the Bulletin.