GMO
Concern for canola
By Robert Arnason
Mexico has become more hostile to genetically modified crops, agricultural innovations and pesticides, which could jeopardize Canadian ag exports to Mexico, says a biotechnology expert from the University of Saskatche
Given changes in policy, there’s a chance that Mexico’s dispute with America about genetically modified corn could spread to other crops.
“It would be very prudent for the Canadian canola sector to be on top of what’s going on between the States and Mexico over corn,” said Stuart Smyth, a U of S agricultural economist.
“Mexico has demonstrated a willingness to try and prevent Bt cotton. They’ve got GM corn clearly in their sights. I think the canola export sector and the entire canola sector has to be very worried about Mexico’s ag and trade policies and the direction they’re heading in.”
For most of 2023, Mexico and the United States have been locked in a political battle over GM corn.
In February, Mexico announced a ban on GM corn use in tortillas and dough, with a plan to gradually substitute the use of biotech corn in all products for human consumption and for animal feed.
The U.S. pushed back against that decision and tried to convince the Mexican government to alter its position, to no avail.
On Aug. 17, the U.S. announced it would use the dispute settlement panel in the U.S.-Mexico-Canada Agreement (USMCA), to challenge the ban on GM corn
“Mexico’s measures are not based on science and undermine the market access it agreed to provide in the USMCA,” the Office of the U.S. Trade Representative said in a statement.
Smyth, who studies agricultural innovation and the regulation of ag technology, is concerned that Mexico’s policies have become more like Europe, where environmental organizations seemingly dictate policies around GM crops and pesticides.
As examples, Mexico hasn’t approved new Bt cotton varieties for several years. The government has also been phasing out the use of glyphosate, the most common herbicide in the world, and is planning a complete ban in March.
Last fall, the national legislature studied a bill that would prohibit 183 pesticides and encourage use of biological products, Reuters reported.
“Mexico, their regulations (were) solidly science-based,” Smyth said. “(But) in the past decade they’ve become very European, where they are precautionary based. Scientific evidence and data doesn’t play much of a role in Mexico’s current regulatory and policy framework.”
If Mexico’s rejection of ag technology continues, it could target other GM crops.
In 2022, Mexico was Canada’s third largest market for canola. It imported $1.2 billion worth of canola seed and $436 million worth of canola oil.
“Mexico is an important and valued market for Canadian canola. It’s Canada’s largest agri-food export to (Mexico),” said Chris Davison, Canola Council of Canada president and chief executive officer. “They have a well-established processing and crushing industry.”
Like Smyth, Davison is concerned that Mexico is moving away from science-based policies for agriculture technologies.
“There have been challenges to regulatory predictability in Mexico over the last few years that have impacted multiple crops. That was reflected in the queue of ag biotech products in their regulatory system,” he said.
“There have recently been some actions to address that, but we’re unsure about potential future direction.”
The outcome of the U.S-Mexico dispute over GM corn may alter future Mexican decisions around agriculture and biotechnology.
The Canola Council of Canada is closely following the dispute panel to see if there are implications for future ag biotech approvals for non-corn crops.
“What we’re looking for is reassurance,” Davison said. “Assurance of a clear and timely and predictable science-based approach.”
He didn’t mention it directly, but Mexico’s opposition to ag technology could have implications for plant breeding innovations like gene editing.
If a gene-edited canola is developed for Canadian farmers, there’s a chance Mexico would not approve the technology or the trait. That could hinder canola exports to Mexico.
Such a scenario is hypothetical, but the risks are real when a country abandons science-based policies.
“There still remains some lack of clarity and certainty about Mexico’s regulatory approach moving forward,” Davison said. “Without that, there’s a concern that similar issues could arise in the future.”
Contact robert.arnason@producer.com
Ukraine expected to harvest record canola crop
By Sean Pratt
Published: 3 days ago
The Ukrainian government expects farmers to plant 4.69 million acres of winter canola this fall following a record harvest this summer. | Reuters/ Valentyn Ogirenko photo
The big harvest is likely to translate into a strong export program with much of the crop destined for European markets
Ukraine is harvesting what analysts expect will be a record crop of canola.
Svitlana Kupreeva, oilseed market analyst with UkrAgroConsult, said farmers planted record acreage of the crop and final yields should also set a new high.
The firm is forecasting 4.2 million tonnes of production, shattering last year’s record of 3.5 million tonnes.
Kupreeva said there is also potential for record exports of canola, oil and meal from the country.
“The key to achieving such results is not only a large rapeseed harvest and the commissioning of new processing plants, but also highly efficient logistics,” she said in a recent article published on the UkrAgroConsult website.
MarketsFarm analyst Mike Jubinville has seen reports calling for an even bigger Ukrainian crop of 5.4 to 5.5 million tonnes.
The obvious market for that crop is the European Union, where it is already weighing down rapeseed futures prices.
The premium of Canadian canola futures over European rapeseed futures has reached “extraordinarily wide levels,” he said.
“We’re not going to ship to Europe and we haven’t for the past year or two,” said Jubinville.
But that is not a big deal this year because of Canada’s short crop and huge anticipated domestic crush program.
Statistics Canada is forecasting 17.56 million tonnes of production, a six percent drop from last year. Jubinville thinks it could be smaller than that, in the low-17 or high-16 million tonne range.
In past years, the split between domestic crush and exports was about 50-50. That will not be the cast in 2023-24.
He is forecasting 10 to 11 million tonnes of crush and 6.5 to 7.5 million tonnes of exports. China, Japan, Mexico and the United States will be vying for that limited volume of product.
There is plenty of economic incentive for a huge domestic crush program and that will set the tone for prices.
Ukraine’s 2023-24 export program got off to a good start with strong sales in July despite the demise of the Black Sea Grain Initiative.
“Logistics are being redirected to the Danube ports and overland routes through the western borders,” said Kupreeva.
But with “constant attacks” by Russia on the Danube and Odessa ports, the September canola export contracts are focusing instead on shipments by road and rail.
Ukraine ships out almost all the canola it produces. The country exported an estimated 3.5 million tonnes of the oilseed in 2022-23, a 26 percent increase over the previous year’s record.
The European Union is the main destination for Ukraine’s canola and meal, while China is purchasing most of its oil.
The EU accounts for about 85 percent of Ukraine’s seed exports.
Reuters reports that Poland, Bulgaria, Hungary, Romania and Slovakia are all in favour of extending an EU ban on Ukrainian wheat, corn, canola and sunflower imports to those countries until the end of the year.
However, they will allow the transit of those cargoes through their countries to other export markets in the EU and elsewhere.
The current ban is set to expire on Sept. 15.
The U.S. Department of Agriculture is forecasting that the EU will use 6.38 million tonnes of rapeseed/canola oil in its biodiesel/renewable diesel sector in 2023, a 2.8 percent increase over the previous year.
Rapeseed oil is still the dominant biodiesel feedstock in the EU, accounting for an estimated 42 percent of total biobased diesel feedstock use in 2023.
But used cooking oil has been gaining ground, with an estimated 4.35 million tonnes of use. It has been capturing most of the lost market share of palm oil, which is being phased out.
Palm oil use is expected to drop 15 percent in 2023 after falling 25 percent in 2022. France, Austria and Germany have already banned the consumption of palm oil-based biofuels. However, the fuel can still be produced in those states if it is for export.
Rapeseed/canola oil remains the most popular feedstock choice due to its domestic availability, the higher winter stability of rapeseed-based fuels compared to other feedstocks and the phase-out of palm oil, according to the USDA.
Strong EU demand for the product could be one of the reasons that Ukrainian farmers intend to grow a lot more canola in 2024.
A government survey of 2,403 Ukrainian farmers shows that 38 percent plan to increase their total seeded area of their winter crops, while 45 percent said they will not reduce it.
“Rapeseed remains the key factor in the expansion of the sown areas, with planted area under it expected to increase by almost 40 percent,” Ukraine’s agriculture ministry said, according to the UkrAgroConsult story.
The government is forecasting 4.69 million acres of winter canola.
Much of the increase in canola planting will come at the expense of barley, which is forecast to shrink by 1.24 million acres or 5.4 percent.
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