25/102/2007 (Taranaki Daily News) - Palm kernel is derived from the oil palm, a native to West Africa and Central and South America.

Most palm kernel imported to New Zealand comes from Indonesia.

Palm oil fruit is reddish, about the size of a large plum, and grows in large bunches that can weigh between 10kg and 40kg.

Each fruit contains a single seed (the kernel) surrounded by a soft oily pulp. Oil is extracted from both the pulp of the fruit (palm oil, an edible oil) and the kernel (palm kernel oil, used mainly for soap manufacture).

The meal is what is left after the oil has been extracted.

Swap Contractors Ltd, at Bell Block, imports a boat load of palm kernel to New Zealand (between 20,000 and 25,000 tonnes) every three and a half weeks and 95 percent goes to dairy farmers.

Morgan Swap says his company has been importing palm kernel for five years and has stores in Bell Block, Auckland, Mt Maunganui and Matamata.

"The market is still growing. but I guess it has got to plateau," he says. "There are more conversions, there is more demand. Animals can get a bit hungry at different times of the year. If a cow, say, needs 18 to 20 kilograms of dry matter and there is no grass, you can give palm kernel. It won't hurt the cows. You can fill them up if you are in a dire situation. A lot of others, you can feed them, but there is only so much you can give them. With this, there is none of that."

Mr Swap blames the poor European grain season, creating a booming European market, for the rise in the cost of palm kernel. The price has doubled in the past two years.

Also on the market is copra extract, derived from the coconut palm after the oil has been extracted. This is often fed with the palm kernel.