14 Dec 2010

Palm kernel suppliers struggle to meet demand

8:25 am on 14 December 2010

Suppliers of palm kernel extract are struggling to keep up with demand as dairy farmers in parched parts of the North Island turn to supplementary feeds to keep their milk production going.

All of Northland is officially in drought again and regions north of Taranaki are rapidly drying out.

Farmers have been trimming stock numbers as they run out of pasture. Some are already drying off cows and going to milking once per day with significant drops in production.

Many rely on palm kernel extract to try to keep production going until forecast rain arrives next month.

Importer Stephen Swap of J. Swap Contractors, says the heavy demand and shipping delays mean that farmers who have not organised a supply contract might miss out.

The demand has sent the price climbing. The operations manager for one supplier, Mike Borrie of RD1 Nutrition, says it is selling for about $360 a tonne on the spot market, an increase of about 50% since June.

Palm kernel extract is a by-product of palm oil production and is imported from Malaysia and Indonesia.