China canola market for WA

31 Mar, 2013 01:00 AM
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WA canola growers will again feed the Chinese market after officials lifted a three-and-a-half year ban on Australian canola imports due to concerns surrounding the root-borne disease blackleg.

It's a massive bonus for Australian producers, with estimates it could boost the pockets of Aussie farmers by up to $825 million a year, working on a canola price of $550 a tonne.

But it wasn't all good news for canola growers in WA.

While Chinese demand for canola ranged from two to four million tonnes, the lifting would extend to all but three Australian port zones - Wallaroo and Port Adelaide in South Australia and Albany in WA, due to high instances of blackleg in seed samples.

Two central figures in winning back the right to export to the Asian giant were the Australian Oilseeds Federation (AOF) and the Grains Industry Market Access Forum (GIMAF), a body set up in 2010 to try and break down trade barriers for Australian grain internationally.

AOF's executive director Nick Goddard said the imports would go to port zones in China remote from Chinese canola-producing areas.

These requirements were established to significantly reduce the risk of blackleg fungus reaching Chinese canola-growing areas.

The agreement also included a joint collaborative research project between Australia and China, sharing knowledge and science about managing blackleg at farm level and testing methodologies for seed-borne blackleg fungus.

"China presents tremendous opportunity for Australian canola and I am confident China will rapidly become one of our primary export markets," Mr Goddard said.

"The benefit for China of course is that it will now have an additional source of imported canola and can source depending on best value delivered to various ports.

"It's a win for both countries."

He said despite the Albany zone's omission from the trade agreement, it was especially exciting for WA growers because they now had access to another market which hadn't been available for about four years.

"Not trading out of Albany is the only disappointment to come out of the agreement in the scheme of things," Mr Goddard said.

"But the Chinese authorities did base their decision on hard facts put together by the Department of Agriculture and Food.

"The group analysed seed samples and where the infection was above a certain level they drew a line in the sand."

Mr Goddard said it was now an absolute priority for the WA canola industry to re-gain access to the agreement for Albany port zone growers.

He said given increased canola plantings in the region there would also still be ample opportunity for the zone to continue to export into European markets.

"Europe has by far taken the large majority of WA canola in the last two years and while that market might soften off a little bit throughout this season it will still be a major destination for the WA crop as will Pakistan," Mr Goddard said.

"Albany zone canola will also fill the gaps left by Esperance, Kwinana and Geraldton zone shipments travelling to China."

Although up to the industry's traders, he said growers could be assured there wouldn't be full silos of canola waiting at Albany for export.

"There will be markets out there that will readily take it," he said.

"WA hasn't been left with loads of canola in the past and I don't think it will in the future just because one market has re-opened and one WA port has been closed off to the agreement.

"As long as Albany zone growers are being paid what their seed is worth, the final destination of their seed won't be of primary concern."

He also paid credit to Department of Agriculture, Fisheries and Forestry (DAFF) officials and GIMAF which he said was a key linchpin between various Australian Government departments and industry.

GIMAF executive manager Tony Russell shared Mr Goddard's enthusiasm.

"It's fantastic news, it's by far the biggest result we've had since GIMAF was set up," he said.

It was a long slog for officials, with Australian Government officials from the DAFF visiting China on four occasions, negotiating with Chinese quarantine officials to try to establish an acceptable trading protocol.

Cargill Australia spokesman Peter McBride said in the last few years China's canola demand had primarily been met by Canadian exporters but industry estimates were that Australia could supply anywhere between 500,000 tonnes to 1.5 million tonnes and he was pleased to see new opportunities into China.

"Cargill believes in free trade, so we think it's a good move this market re-opens," he said.

He also said the addition of another potentially strong trade partner would assist consolidating Australian canola production which had risen sharply from earlier levels during the last two seasons.

The lifting of restrictions is also relevant to GM canola produced in Victoria and NSW and in all port zones except Albany.

The first shipments of Australian canola to China are expected to be shipped during the next four to six weeks.

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