Rape oil, GMOs and China: how new restrictions are changing the export market of the Altai Territory
For companies focused mainly on the Chinese market, such risks are becoming critical.
The situation with the export of rapeseed oil remains one of the most discussed topics in the market of grains and oilseeds. After the Chinese side identified the 35S promoter DNA marker, which is used as one of the hallmarks of genetically modified organisms (GMOs), Russian exporters faced additional restrictions when processing supplies.
The consequences of this situation are already felt by the processors of the Altai Territory, the Novosibirsk Region and the Krasnoyarsk Territory. For many enterprises, exports to China remain the main channel for sales of products, so any changes in control procedures directly affect the financial results of the business.
Why there are restrictions
According to the Rosselkhoznadzor, the reason for strengthening control was the notification of the Chinese side about the identification of a 35S promoter DNA marker in individual batches of rapeseed oil.
This marker is widely used in product research for the presence of GMOs. However, experts note that its detection in itself does not always indicate the presence of genetically modified organisms. In particular, the 35S promoter can have a natural origin – for example, be associated with the cauliflower mosaic virus, which is able to infect plants of the cruciferous family.
Despite this, the admission of products to the Chinese market requires documentary evidence of the absence of GMOs, which greatly complicates export procedures.
Independent laboratories have not confirmed the presence of GMOs
According to market participants, after the return of individual export shipments, repeated product studies were carried out in four independent accredited laboratories located in different regions of Russia.
According to the results of these studies, the presence of genetically modified organisms in the samples was not confirmed.
The discrepancy between the results of various studies remains one of the most pressing issues for the industry today. Manufacturers expect to develop common approaches to laboratory control, which will be equally recognized by all participants in foreign trade.
How restrictions affect processors
Uncertainty over export controls has already changed the behaviour of many businesses.
According to market participants, some processors postpone the execution of permits for export or temporarily suspend supplies. The main reason is high risks for business.
In case of claims, the company may face suspension of export activities, loss of foreign contracts, additional costs for logistics and laboratory research, as well as reputational costs.
For companies focused mainly on the Chinese market, such risks are becoming critical.
China remains a key buyer
In recent years, China has become the main importer of Russian rapeseed oil. That is why any changes in the requirements of the Chinese regulatory authorities have a significant impact on the entire oilseed processing industry in Siberia.
Particularly sensitive restrictions have become for enterprises of the Altai Territory, the Novosibirsk Region and the Krasnoyarsk Territory, a significant part of whose products are export-oriented.
The decrease in supply volumes is reflected not only in the utilization of processing capacities, but also in the procurement prices for raw materials, investment activity of enterprises and the overall profitability of the industry.
What the market needs
Further export development is impossible without transparent and uniform control rules.
Among the most popular solutions, market participants call:
- unification of methods for determining GMOs;
- mutual recognition of the results of accredited laboratories;
- clear requirements for phytosanitary documentation;
- reduction of administrative uncertainty in export deliveries;
- Development of dialogue between Russian and Chinese regulatory authorities.
Prospects
Despite the remaining restrictions, market participants expect that the situation will be resolved at the interdepartmental level. For processors today it is crucial to restore the predictability of export procedures, since it is the stability of the rules that allows planning production, investments and long-term contracts.
Until then, laboratory control and confirmation of the absence of GMOs will remain one of the key factors determining the development of the Russian rapeseed oil market and the export potential of Siberia.
