China GMO canola concerns

[rook]

Does anyone know what is going on with Chinese concerns over GMO canola? Apparently existing permits expire on Apr 20 and there is some concern about renewal.

Is this a big deal or is it merely an administrative thing? Does anyone know anything else about this issue?

[charliep]

I was at a canola industry meeting today and heard a report from the canola council on their annual meeting (in Mexico this year). The issue on the certificates is coming down to the wire. Approval is expected prior to April 20 but the approval process is through the Chinese bureaucrat maze so no guarantees. The Chinese industry (processors, importers, government) realize the need to import.

The issue from the Chinese side comes down to loosing control of GMO crops (with canola/****seed a concern because of the amount they produce) and having it end up contaminating their crops. The issue around regulation isn't so much with current crops (they recognize as safe) but in setting precendents for GMO crops down the road.

The only GMO crop the Chinese grow on any significant scale is cotton. Having said that, China is expending significant amounts of money/research time on transgenic research with the acceptance they will need this technology to feed their 1.3 bln people. Again, the issue is internal control.

What does it mean if the Chinese withdraw from the canola market short term? My S&D puts 2004/05 Canadian canola disappearance in the 6.5 to 7 MMT area (3 to 3.2 MMT exports, 3 to 3.2 MMT domestic crush, 500,000 t seed/dockage) as a base demand. Canola production above 7 MMT means access to China/some other market is important or carryovers will grow.

The other positive thing about China is they tend to be fall buyers. Having a customer who takes product as western Canadian farmers are harvesting/need to sell product to meet cashflow commitments is a good thing. Your other customers tend to buy through out the year.

[wd9]

From canola ink:

"We have received word via the Canadian Embassy in Beijing that the Chinese
Vice Minister for the Ministry of Agriculture, Mr. Zhang, has signed off on
all seven canola event safety certificates. We now expect the safety
certificates will be in the hands of the technology developers by April
15th," says Barb Isman, President of the Canola Council.

The industry will work with the technology developers, Monsanto and Bayer,
to develop a workable system for the trade to access the certificates. The
trade must then submit an application to the Chinese government for each
cargo. There is an indication that this approval process will be expedited
to ensure that there is no disruption in trade, she says.

"It is important to note, however, that until such time as we have completed
the entire process at least once successfully, there is the potential for
problems to occur, and hopefully they will be minor," she notes.

"But to head into the Easter weekend on a positive note, we'd like to thank
the staff at the Canadian Embassy, Department of Foreign Affairs and
Agriculture and Agri-Food Canada for working so diligently on this issue
over the past few weeks," Isman stressed.