A cargo of palm kernel with an estimated value of nearly $6 million, is stuck on board a cargo ship off the Port of Tauranga while officials try to determine the cargo's origin.

The 23,000 tonnes of palm kernel on board the bulk carrier Molat, at anchor in the roadstead, is blocked from entry by the Ministry of Primary Industries.

The Molat at anchor. Photo: Dominico Zapata, FairfaxNZ

Palm kernel processing mills in Malaysia need to be registered to ensure their product meets the required export standard for New Zealand, says MPI border clearance services director Steve Gilbert.

MPI is in ongoing discussions with the importer and these have taken nearly a month because of the large quantity in question.

"The importer would obviously like to discharge the cargo, which is understandable, we are open to that and we are working with them around under what basis we can allow that cargo to be discharged,” says Steve

He refused to disclose the importer's identity and PKE importers Fonterra and Swaps Stockfeed deny the shipment belongs to them and Mount Maunganui-based feed importer ADM New Zealand could not be reached for comment.

"The main discussions at the moment - and to be fair, they have been very constructive between us and the importer - is around how our requirements could be met to prevent any biosecurity risk to New Zealand," says Steve.

While the ship remains at sea, it poses no biosecurity threat.

"It is currently securely contained in the vessel. Unless the biosecurity risks can be managed, the shipment will not be permitted to land."

Molat's palm kernel cargo is denied entry. Photo: Dominico Zapata, FairfaxNZ

For the importer, they could either treat, destroy or re-ship the product.

"What is challenging in this situation is the volume and the size of the product."

He expects a final decision to be made of the shipment's fate shortly. They were close to resolving the issue with the importer and believe a decision will be made in the next few days, says Steve.

"Realistically there is only two choices. The importer elects to take the product to another market, or the vessel is discharged under MPI supervision and treated to MPI's requirements."

The Molat has been anchored off the Mount Maunganui coast since September 6.

Palm kernel extract (PKE) is a controversial cargo because of the tropical rain forest cut down to make room for the palm oil plantations on Borneo and Sumatra. The rainforest clearances are criticized internationally because of the loss of habitat for Orangutang and Sumatran Tigers.

New Zealand is the world's biggest importer of palm kernel extract, which is used as cattle feed.

Greenpeace senior campaign advisor Grant Rosoman says the situation shows there is a lack of knowledge around the supply chain for palm kernel (PKE).

"It could come from anywhere. There's no guarantee where it's come from and it's likely it's got deforestation related to it,” says Grant.

The ship had been in North Sumatra on April 5 before making port in Malaysia. That could link the ship to "highly controversial" palm oil plantations in North Sumatra that are linked to orangutan habitat destruction.

"It's likely to have come from some sources that are linked to deforestation in Sumatra and we are asking all of the importers of PKE to commit to a no deforestation, no peat land and no exploitation of resources [policy]," says Grant.

He applauds MPI's stopping the shipment.

"The shipments carry a number of risks, one is biosecurity and another is deforestation and things like that so it's good all round to have had this [ship] stopped."

Statistics NZ figures show PKE imports peaked in the year to June 2015 at 1.94 million tonnes before falling to 1.86m/t in the year to June 2016.

The MPI amended its import rules in June 2013 requiring PKE only to be imported from facilities approved and regularly audited in exporting countries. To date, the MPI said it had not had to stop any other PKE shipments for failing to meet this requirement.

Federated Farmers Bay of Plenty arable chairman Colin Mackinnon says the MPI has done the right thing by preventing the ship from coming into port.

He says it is "most heartening" to hear they are halting the shipment because of issues over where the PKE was sourced from.

A long time critic of the MPI's efforts around biosecurity, he applauds them for stopping the shipment.

"All the arguments we have had with the MPI would fade away if they became more transparent, which is what they appear to be doing here."

GERALD PIDDOCK/stuff