Exports face price wars as Europe approves GMOs

Kenya and other agricultural produce exporters eyeing the European market could soon face new price wars as the key outlet opens up its doors to more genetically modified foods.

In a development that signalled Europe’s resolve to increase GMO products uptake, the European Commission last week approved the importation of six new varieties of maize produced through the controversial technology.

The approvals, which are valid for 10 years, cover imports for food and animal feed, but not for cultivation.

“The six adoptions of today are the result of a usual and standard procedure concerning the authorisation of GMOs to be used in food and feed and have no link with the recently adopted package on cultivation,” the commission said in a statement.

The EU’s executive arm granted the approvals unilaterally after EU farm ministers failed to reach a decision on the applications in June — providing a leeway for fresh imports of the now approved GM maize varieties from countries such as the United States, Brazil and Argentina.

The current GMO versus non-GMO global market focus relates to four crops: soybeans, maize, cotton and oilseed rape.

Kenya makes shipments of convectional produced yellow corn and sweet corn to the EU market alongside other produce such as vegetables and cut flower.

“Price differentials between GM and non-GM derivatives may increase marginally, reflecting need to check the non-GM status and ensure segregation,” three independent Europe-based analysts, Graham Brookes, Nevile Craddock, and Barbel Kniel said in a joint report of the EU market.

The report is dubbed The Global GM Market; Implications for the European Food Chain — An analysis of labelling requirements, market dynamics and cost implications.

“In addition to the higher raw material costs that may arise from operating a non-GM ingredient policy other overhead costs will arise, dependent upon the size of the business and the complexity of its product and even customer portfolio,” they further said.

They argued that operating costs may be adversely affected by reduced production capacity utilisation from having to shut down continuous manufacturing lines for cleaning, having to operate and install separate storage facilities, and possible reduced functionality of ingredients in products resulting in increased levels of wastage or reduced product shelf life.

“In some cases, it is known that companies have chosen to use particular non-GM ingredients across their product range — and thus incur additional raw material costs — rather that operate segregated storage and production regimes” they said.

Kenya Flower Council CEO Jane Ngige, however, played down threats to the country’s fresh produce exports in the short term.

“We have a competitive edge in terms of naturally grown produce that gives us an edge in costs when compared to other producers who have to endure higher energy costs to grow the same products,” she told Business Daily.