19 Sep 2012

Korean deal buoys deer velvet group

10:46 pm on 19 September 2012

A deer velvet co-operative says a new supply agreement with a South Korean health food company should help to lift deer farmers incomes.

ProVelco, which has 150 shareholders and a 20% market share of New Zealand's annual velvet production of 450 tonnes, has signed a deal with the Korea Ginseng Corporation.

ProVelco general manager Ross Chambers says the co-op will supply a minimum tonnage at the start of each season in return for a fixed contract price starting at $100 per kilogram - about 10% above the current market price.

Mr Chambers says it is a significant move for the company and deer velvet industry.

He says they have a fixed 12-month agreement for the coming season and have signed a Memorandum of Understanding for a further three years.

New Zealand is the world's largest velvet producer and 70% is exported to South Korea.