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1. November 2004 Lula Signs Approves GM Measure As Congress Fails To Pass Biosafety Bill The Brazilian government was forced to issue another provisional measure to deal with GM use in the 2004-05 soybean crop. This provisional measure was necessary in order to avoid a major disruption of the market because the Brazilian Congress failed to pass the new biosafety bill before the planting season, according to USDA. MP Number 223 allows the marketing of the biotech soybean crop until January 31, 2006, but this period can be extended by 60 days. The measure also prohibits the sale of biotech soybean from the 2004-05 harvest for use as seed. As with last year’s MP, all producers using Biotech soybean seed must register and sign a "Declaration of Commitment, Responsibility, and Agreement of Conduct." Without signing this Declaration, producers will not be allowed access to production financing. President Lula waited until the last minute to release another Provisional Measure, (the third one during his administration) because he was expecting Congress to enact the new Biosafety Bill. Although the Senate approved the bill and it is now back in the House, its final approval by the Congress is not expected until next year. Within the Provisional Measure, signed by the President and the Minister of Agriculture, the following amendments to the MP are requested:
Congress has already received 280 proposals for amendments to Provisional Measure Number 223, which indicates that the battle will be intense later this year. Meanwhile, about 20% of Brazil’s 2004-05 soybean crop (October-September) will be genetically modified (GM), Agriculture Minister Roberto Rodrigues said last week. "Of this possible record crop, we calculate around 20% could be GM," he said at the announcement of the government’s first estimate for the 2004-05 season. The Agriculture Ministry forecasts output between 59.5 million to 60.8 million tonnes. Overall grains, oilseed and cereal production in 2004-05 is expected to jump by over 10 million tonnes, reaching a record of around 130 million tonnes. This will put extreme pressure on Brazil’s creaking transport and warehousing systems, Rodrigues admitted. He said emergency investment was needed before crops start arriving from February to cope with the huge volumes to be transported. WTO Ruling On EU Biotech Ban Likely Delayed The substantial volume of scientific data submitted by the EU in its defense of its de facto ban on imports of genetically engineered products likely will increase the time it will take a WTO panel to decide the case. A WTO dispute panel hearing the case had anticipated that it could produce a decision by March 2005. However, the plaintiffs in the case — Argentina, Canada and the United States — reportedly have requested additional time to review the EU’s scientific submission, thus lengthening the timeframe of the process. China Interest Rate Hike Could Slow Soybean Imports China raised its interest rates for the first time in nine years. This signals that Beijing is adopting more market-driven policies to combat an overheated economy. The Chinese central bank announced a rise in its official lending rates in what analysts said was an attempt to guide its economy to a slower path of growth. The bank raised its benchmark one-year yuan lending rate to 5.58% from 5.31% and the rate on one-year deposits to 2.25% from 1.98%. U.S. government officials welcomed the move, saying it was "a positive step" that would prove beneficial to the American economy. By raising rates, some economists say Beijing is sending a signal that despite signs of recent cooling in it economy, China is concerned that inflationary pressures are building. However, the combination of tighter rules on credit and the interest-rate hike likely will not be positive for imports of soybeans. Manitoba and Ontario Soybean Crushers Turn To U.S. Beans Manitoba soybean crushers are importing U.S. soybeans to make up for a lack of domestically grown supplies. Only 33% to 45% of Manitoba’s 187,000 seeded soybean acres have been harvested to date, as wet conditions keep farmers off their fields, according to local sources. Yields are well below average, and green seed is a concern to Ontario crushers in most samples. Of the soybeans still in the field, at least 90,000 acres could be written off by Manitoba crop insurance and cleaned up over the winter, said Murray Froebe, a director with the Manitoba Pulse Growers Association. With domestic supplies so tight, Manitoba soybean buyers have had to find new routes of supply, said Froebe. Martin Harder, general manager at Ontario soybean crusher Delmar Commodities, said the quality of the Manitoba crop was generally poor this year. Contracts have been canceled, and the company is bringing in U.S. beans in order to keep its processor running, he said. Delmar expects to import more than 80% of its soybeans from the U.S. this year, using at most 5,000 tonnes of domestically grown soybeans. Analysts believe that even if this had been a good production year, domestic supplies would still not have been enough to cover Ontario crusher’s needs. Delmar would like to use Manitoba soybeans when possible but will have to blend the poorer-quality Manitoba product with U.S. soybeans in most cases, said Harder. Soy Complex Mostly Higher On Delayed Shipments To China The soy complex closed mostly higher on October 28. The market continues to struggle to find enough cash soybeans to supply strong export needs, but this may become less difficult as Chinese cargoes possibly get pushed back and/or farmer movement may be picks up. November bean futures closed down $0.18, finishing at $194.56; January was $0.64 higher, closing at $196.76 and March gained $1.01 ending at $199.33. December meal was up $0.11, closing at $171.30; January was $0.22 higher, finishing at $172.95 and March decreased $0.22 to finish at $175.60. December oil closed $6.17 higher to finish at $473.77; January increased $5.07, closing at $476.41; and March gained $4.85, ending at $478.52.
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