GroundCover™ Issue: 45
compiled by Dr Mike Taverner from media and industry reports up-to-date at the time Ground Cover was prepared for publication. Readers are advised to seek independent advice if they intend to act on these market signals.
GM: States go own way
While the Federal Trade Minister has joined a US action against the European Union's moratorium on GM products, the states are announcing moratoriums on planting GM crops. Victoria's 12-month moratorium on the plan leaves South Australia as the only state where GM canola may be grown commercially. Victoria's decision was said to be made after a consideration from the wheat exporter AWB and barley marketer ABB that overseas markets would be affected if the state went ahead with GM canola.
The Federal Government believes it is in our longer-term interests to be involved in the US action in case things change in the future. Trade Minister Mark Vaile said: "there are concerns in terms of the safety of the use of GMO product - but, over time, those concerns may be allayed. So we can't say at the moment that we shouldn't be involved in new rules if that's what's taking place".
Asian markets not a problem - GM canola marketing group
Marketlink - the body given the job of marketing GM canola, when or if it's grown in Australia, says most Asian markets will accept the product. Although Europe won't import GM canola, the company's Simon Clancy doesn't anticipate too much trouble putting it into Asian markets. "Japan likes the notion of us being clean and green, but when it comes down to it, they will accept GM canola," Mr Clancy said. "China is a different kettle of fish - they do have strict and stringent requirements for the importation of GM products, but once those requirements have been met, it is possible to get GM products into China."
Feed grain prices
The continued lack of widespread rainfall across the eastern Australian grainbelt has pushed feed·prices back up. Yet the surge 'in-prices has been capped as they approached import parity. Harvest supplies of sorghum kept the northern market from becoming too over-heated. While the stock feeders have been deferring purchases to cover their requirements for the second half of the year, their fear of missing out on supplies and having to pay higher prices saw pent-up demand translate into increased buying activity.
Feed grain markets
Of the 11.5 million metric tonnes (mmt) of stockfeed used by Australian livestock in 2003, cereal grains contribute nearly 7 mmt. A recent study by Australian Bureau of Agricultural and Resource Economics (ABARE) suggests that, in five years' time, over 8 mmt of cereal grain will be consumed by Australian livestock. By 2007, about half of the feed grain cereals will be consumed by feedlot and dairy cattle. Furthermore, nearly 7 of these 8 mmt of feed grain cereals will be consumed along the east coast - it seems likely that our grain production will continue to be differentiated between exports in SA and WA, and domestic markets in other states.
Estimates of feed grain supply are harder to getbecause so much of the feed grain supply is the off-grade food or manufacturing grades. However, ABARE did make estimates of feed grain supply and suggested that nearly 18 mmtof cereal will be available as stockfeed in 2003 and this is not expected to change over the next five years. With the total package of feed ingredients from the grains industry - cereals, pulses, oilseed meals and by-product - Australia produces over 20 mmt of feed grains each year.
New grain buying operation - Australian Grain Accumulation
Following on from their previous joint venture arrangement with the combined purchase of Allied Mills from Goodman Fielder in October of last year, GrainCorp and Cargill announced the formation of a new company. As a combined buyer, Australian Grain Accumulation's 17 field merchants located across the grainbelt (excluding SA) will purchase wheat, coarse grains and oilseeds on behalf of GrainCorp, Cargill and Allied Mills.
The company will bring benefits to growers by providing pricing information on the three companies through one point of contact and make available to growers the complete range of contracting alternatives available to them from each buyer.