Tricky times ahead in marketing GM crop

AS with all aspects of the GM debate, nothing is ever what it seems.

The marketing of the estimated 100,000 tonnes of GM canola to be produced in Australia this season is going to prove interesting.

Key buyers, such as Elders and CBH, will not be buying GM canola this season, a fact which has been pointed out by the anti-GM lobby as proof that the market is rejecting GM products.

The pro-GM lobby says there is still strong support from buyers such as Cargill and Riverland.

So, what's the bottom line?

Currently, the spread between non-GM and GM canola is about $10/t, or about 2.5pc.

It's not a big figure and I suspect most GM producers would claim the rotational benefits would be worth this modest discount.

But is it going to stay that way?

Currently, the GM crop in Australia makes up less than 10pc of the crop, so trading of GM will remain around the margins, with demand either from domestic users happy to buy GM or those with export markets accepting it.

If the GM uptake follows the Canadian pattern, there could be much greater uptake and the lessons of marketing GM this year are not going to be indicative.

Growers will be monitoring the spreads carefully - currently they are not enough to deter them from planting GM, but should the figure jump from 2.5pc to 10pc, maybe the sums would stack up differently.

It all boils down to the spread, so what is the mail on how that will play out?

In a huge surprise, the two sides have divergent opinions.

GM lobbyists say that given key markets such as Japan, China and the subcontinent will receive GM, it's not going to make a difference.

However, the flipside of the equation is that there is no doubt that Europe will not receive GM if there is any other option at all.

There is strong consumer resistance to GM within Europe, and given Australia exported 700,000 tonnes there last year it can also be a crucial destination for the Aussie crop.

Japan, also, while it purchases a bulk amount of canola from GM-dominated Canada, has strong non-GM markets, and there is anecdotal evidence that some key Japanese buyers would prefer non-GM.

Will the demand for non-GM be strong enough to create a meaningful price gap? It won't be the case this season, and it is unknown how it will play out as GM becomes more common in Australia, but there's no doubt marketing strategies have to be taken into account before farmers decide to plant the crop.

Many farmers have already enjoyed strong weed control and expect further agronomic benefits further in the rotation from Roundup Ready varieties, but there's no good in growing a rotationally sound variety that they can't sell.

Watch this space.

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