The price of tallow, a meat industry by-product, has doubled in the past year on the back of soaring demand for biofuel ingredients.
Tallow is selling for close to $US1000 ($NZ1278) a tonne, with most going to China where it is used in soap, but rising prices for competing commodities palm oil and soya bean from the biofuel industry has driven the tallow price to its highest in 30 years.
PPCS by-products marketing manager Geoff Young said demand from the biofuel industry meant there was no cheaper competing product to tallow.
"Tallow has been dragged along,'' he said.
New Zealand produces about 100,000 tonnes of tallow a year.
Four to five years ago, it was selling for $US200 to $US300 a tonne and a year ago $US400 to $US500 a tonne.
Mr Young said tallow, recovered when boned-out carcasses are cooked, was not yet used in biofuels, but researchers were looking at the possibility.
While tallow has soared in price, the latest ANZ commodity price index shows animal skins were worth 61% more than a year ago.
The index shows prices for New Zealand's key export commodities rose 2% in March, taking the index to a high of 218.2.
The index tracks price changes for 13 key export commodities.
ANZ economist Steve Edwards said seven of those rose, three were unchanged and three fell.
Venison returns led the increase, rising 10.1%, benefiting from a surge in demand in Germany following a marketing push last year, along with stable stock prices.
Mr Edwards said seafood rose 7.7% in the month, aluminium 7.4%, beef 4%, logs 1.2%, dairy 1.1% and wool 0.7%.
Skins eased 1.6%, lamb 0.6% and sawn timber 0.3%.
While skins on an annual basis were 61% higher than a year ago, dairy products were 46% greater and the only commodity lower in price was apples, 20% lower.
Mr Edwards said the New Zealand dollar had eased in value against the currencies of all our trading partners except the United States dollar.
That easing helped the index rise 2%.
