East coast GM price gap cut

Haidee VandenbergheCountryman
The West logo

AWB will guarantee a price discount of no more than $10 a tonne for genetically modified canola in a bid to shore-up supplies next season.

However, the contracts are only available for GM canola delivered direct to Cargill's crush facility at Newcastle in New South Wales and must be contracted before June 29.

The grain marketer is remaining quiet on whether a similar pricing scheme will be introduced for WA growers, claiming it won't know either way until mid-year.

Last season the price spread between GM and non-GM canola grew to up to $50 a tonne at times and in WA was at $30-$40/t this week.

On Monday, Emerald was pricing 2012-13 GM canola at $559/t and non-GM at $593, while Viterra was offering $555 for GM and $595 for non-GM.

AWB had non-GM canola at $587 and GM canola at a $30 discount.

However, the price spread hasn't deterred growers - WA farmers are expected to grow almost a third more GM canola this year compared to last season. In 2011-12, WA farmers planted about 90,000 hectares of GM canola.

Based on seed estimates, Monsanto believes about 125,000ha could be planted this season.

Corporate affairs director for the Cargill-owned AWB, Peter McBride, said a guaranteed price spread between GM and non-GM canola could be rolled out in WA but not until they knew how the pilot pricing program performed in NSW.

"We haven't made a final decision on whether we will roll it out in WA," he said. "We need to talk to CBH and we will await the outcome of the east coast pilot program before making a decision on whether we will roll it out in WA."

Mr McBride said the GM canola crushed at the Cargill plant was mainly destined for Asian markets and any similar pricing arrangement in WA would likely to be set at a spread of more than $10/t.

"We may roll it out in WA. If we do, it most likely the price spread will not be the same $10 guarantee," he said.

"There are two reasons - we have a Newcastle crush plant where we can crush the canola, so it assists us there, and the other is we will be serving different customers."

Mr McBride said that it was possible there could be a similar pricing structure in place in WA for the coming season but AWB would not be able to confirm that until the middle of the year.

The Grain Industry Association estimates WA growers will plant 915,000ha of canola this season compared to 749,000ha last year.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails