Australian canola faces EU price challenge
Non-genetically modified canola from Australia will only maintain its favourable market share in Europe while it continues to compete on price, according to Cargill's Katie Colvin. But she says premiums paid depend on the demand-pull from importing nations.
During the past 12 months, Europe has been one of the main destinations for Australian canola. “This typically is a non-GM dominated market, but we are starting to see these trends change as Canadian seed makes its way into Europe,” Colvin said.
"If we see a recovery in the European crop, and less import volumes are required, Australian seed will be competing against Canadian seed, which will result in the spreads narrowing."
Niche markets
Colvin, a canola merchant, said any extra demand for Australian GM-free canola was more from niche markets.
"There may be some niche markets for specific buyers into Japan. There are rigorous testing procedures in Round Up Ready and non-GM producing states, which ensures the integrity of the non-GM canola is maintained from Australia," she said.
Furthermore she said that, "Australia has some freight advantages into Asian destinations versus Canada, and at this stage our non-GM crop can also ensure somewhat easier access to Europe."
Colvin said Japan and Europe only chased non-GM canola if the price was right. "There is capacity in the countries to switch from non-GM canola if it gets too expensive," she said.
