Australia may sell transgenic canola to Japan

MARKETERS of genetically modified canola grown in Western Australia could sell the oilseed to Japan if it were allowed to be grown commercially, a key marketer said.

Brian Mumme, general manager of Cooperative Bulk Handling Limited's Grain Pool marketing unit, traditionally the largest grain and oilseed exporter from the state, said there is a market in Japan for both GM and non-GM canola going forward.

"While our major canola customers are accepting of GM canola, there will still be a small, niche market available for non-GM canola," Mumme said in a statement.

He was commenting after meeting with some of Grain Pool's key canola customers in Japan to gauge the demand for GM and non-GM canola.

Late December, the Western Australian government approved limited commercial-size trials of GM canola, clearly as a prelude to possible full-scale commercial use.

"GM canola could potentially offer higher yields through better weed control and less fuel usage," Agriculture and Food Minister Terry Redman said at the time.

Trials will begin in the 2009 winter cropping season, involve about 20 farmers and approximately 1,000 hectares, in a move that broadens commercial trials of GM canola allowed in 2008 in New South Wales and Victoria states.

Japan is a crucial market for Western Australian canola and is the largest importer of canola in the world, Grain Pool's Mumme said.

It is also a key customer for Grain Pool and, unlike any other market, consistently buys Western Australian canola each year.

Japan has played a significant role in the development and growth of the canola industry in the state, with the largest two buyers of canola in Western Australia acquiring more than 80 per cent of the canola imported into Japan, he said.

One of Grain Pool's largest canola customers in Japan is also the largest buyer of canola in that country and currently purchases both GM and non-GM canola for its milling operations, he said.

"While the demand for canola in Japan is on the increase, they have noted that the demand for non-GM canola is on the decline, due to a variety of factors," Mumme said.

However, another of Grain Pool's customer groups in Japan currently provides a small, niche market exclusively for non-GM canola. This particular customer group is a consumers' cooperative that wants to develop a sustainable and environment friendly society - one that doesn't include GM products, he said.

They acquire 3,000-4,000 metric tonnes a year from Grain Pool, or about 80 per cent of their annual needs of non-GM canola, with the remaining 20 per cent sourced directly from non-GM sources in Japan, he said.

"While this group has some concerns about the introduction of GM canola in Western Australia, they do believe that both GM and non-GM canola has the potential to co-exist in Western Australia, so long as the appropriate separations are in place throughout the supply chain - from the farmer through to the end user," Mumme said.

Grain Pool wants to be able to market both GM and non-GM canola into its key markets, including Japan, he said.

The most recent forecast for canola production in Western Australia estimates output from the crop planted in mid-2008 and harvested around the year-end might have reached a record 1.2 million tonnes, nearly all of which is available for export given the limited domestic crushing capacity in the state.

With bids in Western Australia currently around A$540/tonne delivered port zone for canola, this suggest exports from the state could be worth well in excess of A$1 billion.

Western Australia accounted for about 60 per cent of natonal output from the last canola crop.