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The new season opened strongly and farmers reported early inquiry from buyers at prices 10% to 15% above last season’s close.
Regulatory changes in China last season led to a loss of buyer confidence and a dip in prices that did not reflect the steady growth in demand for New Zealand velvet from China and Korea, its major markets, Mr Griffiths said.
"Indeed, overall demand was such that some buyers who held off making their purchases in the belief that prices would fall further, nearly missed out on supply.
"Lesson learnt, Korean and Chinese companies are now actively buying to ensure they get the velvet they need," he said.
DINZ estimated production would reach 675 tonnes this season, up slightly on last season.
That increase would be needed to meet growing demand for velvet as an ingredient in health foods in Korea, which DINZ estimated accounted for 150 tonnes of velvet a year.
"Health food products are bringing in new consumers, it’s not just a case of velvet consumers moving from a traditional to a more modern form of product.
"The growing consumer demand is also attracting more large manufacturers, all of whom are seeking New Zealand velvet for new health food products of their own. Some are also using our New Zealand velvet quality mark prominently on their packaging and in mass media advertising."
An important industry goal was to encourage the development of a market for New Zealand velvet-based Healthy Functional Food (HFF) products in China and that market had the potential to be "huge", Mr Griffiths said.
"Chinese HFF companies are strong and in some cases bigger than their Korean health food counterparts. To date, they have held off from developing velvet-based HFFs because of regulatory barriers. These have been largely resolved, so we are very optimistic," he said.
In the meantime, South Korea remained the dominant market as about 60% of all New Zealand velvet is consumed there.