Canola growers may be boiling over with enthusiasm for biodiesel but the world’s largest oilseed crusher is lukewarm to some aspects of the alternative fuel.
In an interview before his Jan. 12 presentation at Crop Production Week, Carl Hausmann, president and chief executive officer of Bunge North America, outlined some of his concerns with biodiesel.
Chief among them was that the emerging alternative fuels sector will take production away from Bunge’s clients in the food sector.
“There is only a limited amount of canola that can go into biodiesel without losing the loyal and good-paying customer base that we have today,” said Hausmann.
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“It would be a big pity to tell the major food customers, whether they be Kraft, Kellogg’s, any of them, ‘I know you like this high premium oil but we’re not going to sell it to you anymore because we’d rather make biodiesel out of it.’ “
Ten years ago canola oil consistently sold at a discount to soybean oil in order to gain market share. Today it is consistently sold at a premium. Hausmann wondered if it makes sense to shift strategies at this stage and start promoting it as an industrial product.
“I don’t want to see us turn our backs on the customer base that we have spent 15 years in the canola industry trying to develop and cultivate.”
Despite those misgivings, Bunge isn’t completely opposed to the alternative fuel. In fact the company has been a player in the European biodiesel sector since 1992.
Bunge would consider investing in a Canadian biodiesel sector as long as growth of the industry was slow and controlled and had the full support of the federal government.
At a minimum, the company would like to see the implementation of a 31-cents-per-litre blender’s tax credit to harmonize with U.S. biodiesel policy, which would help overcome his trepidation with the commodity.
“I do think that biodiesel is an interesting product but without consistent, clear governmental support, we would be nervous to invest in it,” said Hausmann.
Stan Jeeves, vice-president of the Saskatchewan Canola Growers Association, doesn’t share Hausmann’s concern about supplies for the food sector, especially after listening to speakers at Crop Production Week tell him about the burdensome supply of the crop.
“Anything that can increase the demand base for that crop, which I have in my bins, will be rewarding to me,” said the Wolseley, Sask., producer.
Jeeves believes Canadian growers can produce adequate supplies of both edible and industrial canola oil that will fetch premiums in their respective markets.
“Yes, it’s a high quality (food) oil, but it also produces high quality biodiesel,” he said.
And with rising transportation costs, it is important to explore domestic markets for the commodity.
“We have to find uses at home because I don’t think we can be so reliant on exports going into the future,” said Jeeves.
