Canola industry executives had their thumbs on the champagne cork earlier this week in anticipation of a long-awaited announcement out of Europe.
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_____ UPDATE – March 11, 2009 _____
EU approves GM oilseed rape T45 for feed, food use
The European Commission said March 10 it had cleared GM canola genetic trait T45 for feed and food uses and import and processing, Reuters reported. Read Also
USDA’s August corn yield estimates are bearishThe yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn. “The authorization of this GM oilseed rape is important as it will allow the resumption of imports of oilseed rape in the EU from Canada,” the EU executive said in a written statement.
This confirms The Western Producer’s March 9 story on the expectation of the approval.
The authorization is valid for 10 years, and any products derived from this GM oilseed rape will be subject to the EU’s strict labelling and traceability rules, the statement said. |
The European Commission was scheduled March 10 to declare final approval of T45, an obsolete Bayer CropScience LibertyLink trait, removing the only remaining obstacle standing in the way of Canadian canola moving to Europe.
The announcement was scheduled after the Western Producer’s March 9 editorial deadline, but Canola Council of Canada president JoAnne Buth was confident final approval was imminent when interviewed late last week.
“People have been notified in Europe. I don’t know if it has been published, but everybody seems to know that it will be authorized on (March 10),” she said.
“We’re pretty sure it’s a done deal. But you know, with the European Union all sorts of funny things happen.”
Canadian canola has been shut out of the EU since shortly after genetically modified canola was commercialized in 1995. European politicians and regulators have been mulling over GM canola applications ever since.
“It’s over 10 years, which is stunning considering regulatory systems around the world can typically do this in two years,” Buth said.
She added that Bayer and the canola council have been “working tirelessly” on getting T45 over the final hurdle. The commission’s approval will be a monumental development for the industry.
In the early 1990s, Europe was at times a big customer for Canadian canola seed. In 1994-95, growers shipped 1.14 million tonnes to Belgium, Denmark, France, Germany, the Netherlands and the United Kingdom. By 1997-98, after the restrictions on GM imports, sales to Europe had fallen to 11,000 tonnes.
Buth cautioned that lifting the ban might appear anti-climatic given current market dynamics. Ukraine has greatly increased canola acreage in the last two years and this year has flooded Western Europe with cheap rapeseed.
“Traders have said that the economics aren’t right, right now. So they don’t expect that there will be exports to start with just because of the pricing,” she said.
However, having the option to ship Canadian canola to Europe will be an important long-term development. China is expected to buy a record amount of Canadian canola this year, but it is an unpredictable customer, so having another group of buyers will be important in years when China isn’t in the market in a big way.
“Depending on all the other factors, it will bring stability to pricing,” Buth said.
When oil and seed are shipped to Europe, they will likely be destined for the biodiesel market, so demand will largely hinge on what Europe does with its biodiesel mandates and subsidies.
Buth said she will be interested to see the mix of seed versus oil shipments once Canada’s new crushing facilities are operating.
It is a good sign that the industry is turning its mind to those kinds of supply and demand concerns rather than wrestling with regulatory issues.
“It has been a long and frustrating process,” Buth said.
