A New Zealand deer farmer co-operative is looking to increase its supply of velvet to a big Korean health food company after a successful first year contract that has broken new ground in the antler trade.
ProVelco has about 150 farmer shareholders and handles a quarter of New Zealand's velvet production.
It is just finishing off the first season of a supply agreement with international health food manufacturer Korea Ginseng Corporation (KGC).
Provelco chairman Graeme Sutton says the first year's contract was for a relatively small portion of its velvet supply, but KGC is looking for more.
Mr Sutton says this is signficiant, because being able to offer deer farmers a fixed contract gives them price stability in a trade that has been characterised by boom-bust cycles.
He says contract prices in the first season were comparable with spot market prices for some velvet grades, and ahead for others.
Mr Sutton says the supply arrangement with the KGC reduces dependence on the traditional medicine market which takes the bulk of New Zealand velvet exports.
He says because deer antler is a health food product there are stringent quality and hygiene controls, and it requires the traceability the New Zealand industry can provide.