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The
lost markets of Genetic Engineering
Digest
prepared by Greenpeace April 2001
"Farmers are really starting
to question the profit-enhancing ability of products that
seem to be shutting them out of markets worldwide"
Cory Ollikka, Canada's
National Farmers Union president calling for a moratorium
on GM crops, December 2000
Proponents of Genetic Engineering
such as the United States Government often attempt to depict
GE foods and crops as an economic boon that will leave behind
those countries and producers who fail to embrace this radical
new technology. In fact the reality in is quite different;
GMO’s are losing world markets hand over fist.
Trawling through the official reports of the United States
Department of Agriculture (USDA) and other trade reports it
is abundantly clear that far from boosting economies the cheerleader
GE crops – especially soya and corn are running into trouble
and losing markets for the handful of nations who have been
foolish enough to grow GE crops. (1)
In 1998 analysts from the Deutsche Bank published two farsighted
report entitled ‘GMO’s are Dead’ and ‘Agbiotech – thanks but
no thanks’ which described the beginnings of a ‘two tier market’
where GE crops are shunned and GE-free crops command large
rewards and premiums. (2)
Below is a partial digest of markets lost and gained in Asia
and Europe due to the decision to plant or avoid GE crops.
It illustrates how the Deutsche Bank prediction was entirely
correct – that rather than benefit global agricultural producers,
embracing GE varieties costs trade and money.
European
Markets
Corn – US imports at a standstill
According to the United States Department of Agriculture
(USDA) " US corn shipments to the EU have come to a standstill
in 1999/2000 . Given that GMO approvals are currently suspended
in the EU it is very unlikely that EU corn imports from the
US will resume in 2001 other than negligible quantities of
speciality corn." (3) Indeed EU countries have this year imported
just 1,300 tons of U.S. corn out of a total 11 million tons
of corn imports , mostly from South America where non-GE corn
is available. (4)
Even amongst the South American corn the balance is clearly
tipping. On Jan 15th Brazil’s leading grain co-operative
announced it had just won its first contract to supply 150,000
tonnes of corn to Spain. Reuters reported that Argentina was
hoping to win the contract "but Brazil won the contract to
supply the European nation with animal-food grade corn because
it can offer grain that is not genetically altered". According
to reports Spain paid well over the market price and is expected
to buy more. (5)
Soy – Markets either declined
dramatically or lost entirely
U.S. soybean exports to Europe have declined from $2.1
billion in 1996 to $1.1 billion in 1999, (6) and will likely
decline further as promises by livestock producers to avoid
GE animal feed become reality. Below are a few national examples
of European soya rejection:
France
Between 1997 and 1999
U.S. shipments of soybeans and soybean meal to France "declined
dramatically". The import share of U.S. soybeans and soybean
meals in France decreased from 55 percent to 41 percent and
from 8 percent to 0.7 percent, respectively. "This was due
to both GMO concerns in France and to the growing availability
and competitiveness of South American products" said the USDA.
(7)
Since 1999 however the largest French supermarkets and poultry
producers have pledged to stop feeding GE soya to livestock
and US imports are likely to drop even further. In February
2001 a pool of French pork and poultry farmers and animal
feed makers led by retailer Carrefour signed a deal to buy
non-genetically modified soybeans from Brazil. The group will
buy 180,000 tonnes of Brazilian soybeans this year in support
of Carrefour's policy of removing GMO’s from its products
and will pay a premium of 125 francs per tonne over the current
market to do so. Carrefour intends to extend this non-GE policy
further explaining "Our potential with all our other order
books, sheep and cattle, is for a total 300,000 tonnes." (8)
Italy
According to the USDA,
Italian imports of US soy almost halved from 563,000 MT to
just 284, 000 MT between 1996 and 1999. Argentina which exported
337,000 Mt in 1996 had by 1999 lost its place in the Italian
soy market altogether. (9)
Norway
The US which previous
to 1996 provided sixty percent of soy to Norway has entirely
lost all soya sales to Norway due to public opposition to
GMO’s. The USDA notes that "the import market annually denied
U.S. suppliers currently stands at approximately US$ 60 million".
(10)
Spain
While overall soybean
imports remained unchanged in 1999 at about 3 million tons.
The U.S. share of the market slipped to 42 percent, 16 percentage
points less than in the preceding year. More dramtically while
imports of Soybean meal increased to nearly 2.5 million tons
from 1.9 million. 1999 U.S. soybean meal imports declined
from 430,000 tons to only 6,000 tons. (11)
Sweden
The United States Department
of Agriculture notes that although the Swedish feed industry
is dependent on imported protein and oilseeds "The U.S. share
of import is nonexistent since 1996 due to sensitivities to
GMO products. Among the feed industry and the dairies there
is a certain determination to maintain the policy "to do as
much as possible to ascertain GMO-free-feed" and it is not
likely that U.S. products will gain access any time soon."
(12)
UK
In 1996 the UK baking
industry (worth £2 billion) stopped using GE soya flour in
favour of identity preserved Canadian flour because of GE
concerns. (13) Subsequent surveys have shown an almost total
rejection of other GE soy ingredients (including oils and
lecithins) by every major supermarket and food producer. 2000/2001
also saw commitments by the largest poultry and pig companies
on behalf of leading supermarkets to avoid feeding GE soy
to livestock. (14)
Even before the latest moves on animal feed U.S. exports of
soybeans to the UK had declined from 459,500 MT in 1998 to
232,300 MT in 1999, a decline of almost 50 percent. The USDA
noted that " U.S. soybean exports to the UK have suffered
because of the hysteria surrounding genetically engineered
(GE) food. The United Kingdom has been at the forefront of
hostility to agricultural biotechnology in Europe." (15)
Canola (Rapeseed) – Canada
loses a market. Australia gains a market
By
1998 Canada had entirely lost its $300-400 million sales in
canola sales to Europe. By contrast Australian trade authorities
announced Jan. 8, 1999 the largest shipment of canola (rapeseed)
ever exported from Australia. The $16.5 million dollar shipment
was bound for oilseed crushing plants in Europe. According
to Graham Lawrence, managing director of the New South Wales
Grains Board, "Europe has moved to become a major buyer this
year because Australia is the only country to guarantee non-GM
canola." (16) By August 2000 Australia was boasting 150,000
tonne exports of canola and receiving a premium of $5 per
tonne over the price of Canadian canola – enjoying a market
that was non-existent before GE crops destroyed the opposition.
(17)
Planting Seeds – seed market
reduced through contamination
In the wake of a series of GE seed contamination scandals
throughout 2000, sales of all US seeds to Europe are down
from 81.7 million MT in 1999 to just over 55 million MT amounting
to a loss of 44.2 million dollars. (18)
In 1999 Imports of US planting seeds to France, the most important
European seed market fell by 25 percent, losing over 12 million
dollars of US trade. Meanwhile imports of corn seeds plummeted
by 34% partially as a result of "the controversy on GMO’s".
In November 2000 the USDA noted that "adventitious contamination
of conventional seeds by genetically modified seeds may further
hamper US seed exports to France, especially for corn and
soybeans" (19)
Following the discovery of 847 tons of contaminated cotton
seed, the Greek agricultural minister decided that 560 hectares
of Greek cotton had to be harvested separately and excluded
from any food use. The contaminated seed lots had been imported
from the United States and the government subsequently required
importers to provide GE-free certificates. The US currently
supplies 75% of Greek cotton seed. Given the widespread GE
contamination of US seed major seed houses are moving to 100%
national production and cutting out import. (20)
Zeneca Tomato – squashed
In 1995 the Zeneca company (now Syngenta) introduced a
GE tomato to the UK market sold as a tinned tomato paste.
It was the first GE product to be sold in Europe and was clearly
labelled. In 1999 enquiries by Greenpeace confirmed that both
supermarkets had discontinued sales of the GE paste because
consumers were refusing to buy it. The tomato paste was last
sighted in June 1999 when Monsanto was trying to give away
out-of-date tins to children at a German Youth festival. (21)
Thai processed products rejected
in Europe.
Tuna: Thai Tuna was stopped from entering both
the Netherlands and Greece because it was canned in soy oil
that may have been genetically engineered. These countries
need GMO free certificate. (22)
Flour:
"Doi
Kham, a food processing company under the royal project, conceded
yesterday its shipment of flour was rejected by a German importer
who charged that the soybean was genetically-modified, but
the company denied the charge." (23)
Asian Markets
Japan
Japan is the single most important market for US corn,
soybeans and also consumer products. Like Europe there is
also growing Japanese consumer resistance to genetically engineered
food with major companies such as Nissin foods, Kirin brewery
and Mitsubishi declaring GE free policies.
Soy
On April 1st 2001 mandatory
labelling of GE foods came into effect and according to the
USDA "many food manufactures started seeking non-GMO soybeans
from North America and South America with a notable shift
already being evidenced in the trade figures. Both Canada
and Brazil are reportedly promoting non-GMO soybeans to Japan
with Canada’s share in volume terms increasing from 2 percent
in 1998 to 3 percent in 1999. Brazil’s share grew from 11
percent to 12 percent in 1999.". (24)
In fact since March 2000 the day to day rejection of GE soya
has been very evident on the Tokyo grain exchange which now
operates a separate futures market for non-GMO soybeans. For
March 2001 just under 300,000 non-GMO soybean contracts were
traded as against only 201,000 GMO soybean contracts. (25)
The future is of the Japanese soya market is clear; non-GMO.
Corn:
The
future of the Japanese corn market is also clear. Following
the discovery in October 2000 of unapproved Starlink corn
in the Japanese food system, Japan turned back shiploads of
US corn refusing to import any more corn until the US could
gaurantee there was no Starlink contamination. The USDA recently
noted that "Due to Japan’s detection of StarLink food corn
last fall, imports of U.S. corn between November 2000 and
January 2001 declined 10.7 percent". (26)
While the US is now implementing checks for Starlink on all
corn exports to Japan, many market players are nonetheless
looking to avoid GMO’s altogether. In February 2001 Japan
announced plans to buy corn from China instead of the United
States and also to buy some from Europe. (27) On Feb 14th
French grain co-operatives announced that for the first time
ever Japan was starting to buy corn from France beginning
with an 8000 tonnes shipment to the Mitsubishi corporation.
As Reuters reported "In effect Japan, the world leading corn
importer, is being unfaithful to the United States, the world
leading exporter, in favour of GE-free guarantee of French
products even though the price of the French grains was 30%
higher than that of the Americans." (28)
Papaya
In 1998 Hawaiin papaya
growers first planted ‘Sunup’ a genetically engineered papaya.
Unfortunately for them the Japanese accounts for 40% of their
market and are unwilling to buy GE papayas. According to reports
non-GE papaya growers are getting 300%-700% premium for avoiding
the GE variety. Meanwhile non-GE farmers in Mindanao Philippines
are benefiting from Hawaii’s reduced ability to offer conventional
papaya. (29) A similar variety of GE papaya is ready for commercial
growing here in Thailand.
Republic of Korea
Soy -Tofu firm loses
billions
Pulmuone, South Korea’s
largest maker of tofu and soybean products, announced in July
2000 that it would stop using GE beans. Pulmuone suffered
a significant drop in sales after the Korea Consumer Protection
Board disclosed last November that the company used GM beans
in the majority of its tofu products produced and sold in
Korea. (30)
Korean state importer buys
only non-GE Soy
The Korean state trading
company, Agricultural and Fisheries Marketing Corporation
(AFMC) that is authorized by law to import food-grade soybeans
notes that it intends to continue buying non GE soybeans for
food processing in 2001. At present the US is the lead supplier
with exports of 260,000 mt and unusually American countries
have said that they will be able to provide segregated non-GE
soybean. However according to the USDA "soybeans from Canada
and China have been gaining market share in the food soybean
market since biotechnology became an issue" (31)
Corn – Korea gets Starlinked
Like Japan, South Korea
also detected Starlink corn in US imports and last year detained
over 55,000 tons of Starlink contaminated imports – so much
that the Korea Corn Processing Industry Association (KCPIA)
has said it will file a damage claim against Aventis. (32)
The Government of Korea now requires that all US corn imports
are accompanied by certification that they are ‘Starlink-free’
– a criteria that is going to be difficult to meet given the
widespread contamination of US corn seed. In reality corn
buying is likely to shift to other non-GE markets. American
corn growers are also sueing Aventis claiming that they have
lost all Korean sales. (33)
Saudi Arabia
According to a 1994 study Saudi Arabia is the 12th
most important market for US processed foods (34) and is also
important for Thai exports. It also has some of the strictest
GMO labelling in the world as well as a ban on GE animal products.
As labelling policies have come into effect a number of exporters
have had products refused entry. Below are 2 examples.
Thai Tuna
Almost 70% of Tuna
sold in Saudi Arabia comes from Thailand in a market worth
about one billion bath a year. In march 2000 the Saudi government
seized imports of Thai tuna that it believed were packed in
GE soya oil and embargoed further imports. In one case the
Saudis rejected a US $2.6 million dollar shipment from a major
Thai tuna packer because of GMO soy oil contamination. On
April 2nd 2000 it was reported that the Saudi government
had "launched a nationwide campaign to confiscate 15 kinds
of Thai Tuna believed to contain GE soy", expecting to confiscate
millions of packages of tuna. Currently Thai tuna exporters
to Saudi Arabia are expected to provide certification that
their products are GE-free and many are switching to sunflower
oil to provide this assurance. Thai Tuna has also been turned
back from Egypt, Greece and the Netherlands because of concerns
over GE oil. Many EU supermarkets have also pledged to avoid
GE oil. (35)
Greek olives
In December 2000 Greek
exports of olives to Saudi Arabia came under scrutiny for
also using soy oil. The Chamber of Commerce and Industry asked
the exporting companies to either stop the import of any food
product containing GE ingredients such as soybean oil, corn
oil, rapeseed oil or else provide GE free certificates.
References:
(1) See USDA Attaché reports
at www.fas.usda.gov/scrptsw/attacherep/default.asp
(2) Reports
prepared by Alex Brown, Deutsche Bank. July 12 1999
(3) USDA Gain report #E21034 3/16/2001
(4) Chicago Sun Times, Mar 26 2001 "Ailment not opening market
for corn"
(5) Sao Pablo, jan 15 2001, Reuters – "Argentina loses trade
due to GM’
(6) see David Barboza, ‘In the heartland, genetic promises’,
NY Times March 17, 2000
(7) USDA GAIN report #FR0016 2/17/2000
(8) Carrefour leads purchase of non-GMO Brazil Soy, Paris
Feb 22 2001 – Reuters.
(9) USDA GAIN report#IT0019 6/23/2000
(10) USDA GAIN Report #NO0004 4/28/2000
(11)USDA GAIN Report #SP0022 5/31/2000
(12)USDA GAIN Report #SW0002
(13) Press release April 1999 "1999 Annual report reaffirms
the federation of bakers commitment to GM-free bread"
(14) see "The shoppers guide
to GM"
(15) USDA GAIN Report #UK0019 5 June 2000
(16)
Food bytes #17 March 2nd 1999
(17) Reuters, Aug 18 2000
"Non GM Canola scores first premiums"
(18) USDA FAS seed circular:
Country exports –N US planting Seed trade 27/3/2001
(19) USDA GAIN Report #FR0097
11/22/2000
(20) Personal communication
with Nikos Charambides of Greenpeace Greece 1st
April 2001
(21) personal Communication
with Greenpeace Germany June 1999. the Youth fair was You
99 in Dortmund.
(22) (report from export
facilitate committee 6/1999)
(23) (See:
Bangkok Post, 29 Sep 1999, "Shipment of local soybean sent
back; Firm denies charge of GMOs in flour", by Ploenpote Atthakor)
(24) USDA GAIN report #JA0050
4/25/2000
(25) (see http://www.tge.or.jp/english/em300.html)
(26) USDA GAIN Report #JA1026
(27) Reuters Feb 27th 2001
"Japanese Grain-Corn buyers turn back on US, eye china"
(28) Reuters, 14th
Feb 2001 "Japan buys maize for the first time from France"
(29) 27th April
2000 "Uphill struggle for Hawaii’s Biotech Papaya" Cropchoice
News
(30) Pulmouone to stop
using GM beans – the Korea Herald, 28th July 2000
(31) USDA Gain report #KS1007
2/28/2001
(32) Asia Pulse March 26th
2001 "US GM corn makes up 99% of imports refused entry to
Korea"
(33) The Kansas City Star,
March 27 2001 "Missourians jump into Starlink dispute"
(34) "Globalisation of
the processed food market" USDA ERS 1994
(35) XINHUA NEWS AGENCY.
April 2, 2000, : Saudi Arabia Launches Campaign To Confiscate
Thai Tuna Products.
BANGKOK POST November 21,
2000 Sunflowers are a blossoming industry.
BANGKOK POST March 14,
2001 Clarification sought over GM
presence in our food
BANGKOK POST April 14,
2000 Tuna firms say certification could help end ban by Saudi
Arabia
BANGKOK POST October 2,
2000 Thais seek talks with Egypt on tuna ban
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