What has yellow flowers, grows thousands of miles from the
sea, and is the best friend of piscatorial kind?
The answer is canola.
If that sounds fishy, that's because it is. Nufarm, the
agrichemicals and seeds group, is developing genetically modified canola seed which
produces rather than typical canola oil (or rapeseed oil) long-chain, omega-3
oils, "similar to those found in fish oil".
Indeed, the GM seed has been derived through switching into
canola the genes from marine microalgae which manufacture omega-3 oils, and which
represent an important part of fish diets. Hence the concentrations of omega-3
oils in marine catches.
"This project adds microalgae genes to canola, using
world-leading genetic breeding technologies, so that the crop is rich in these
higher-value, higher-nutrition oils," said Australia-based Nufarm, whose shares
touched a seven-year high on Wednesday.
Saviour of wild fish
The group added: "This new proprietary product aims to help
relieve pressure on wild fish stocks, which are the current source for this
important nutrient," with the harvest from one hectare of the crop seen
producing omega-3 equivalent to 10,000 kilogrammes of fish.
The GM canola is seen meeting demand for omega-3 oils from aquaculture, as well as for human requirements.
Nufarm said that it was planning to grow up to 4,000
hectares of the crop this year under the stewardship of the US Department of
Agriculture as part of the process for gaining approval for the crop.
Filings for US and Canadian consent are expected to be filed
this month, with Victoria-based Nufarm having already applied to Australian
regdulators for clearance.
"Pending regulatory approvals, commercialisation is expected
to commence in 2018 or 2019," the group said.
Brazil credit squeeze
The announcement came as Nufarm unveiled a return to the
black for the half year to the end of January, reporting earnings of Aus$20.0m,
compared with a loss of Aus$91.0m a year before.
While the improved result was down in the main to the
non-recurrence of huge restructuring costs which marred year-ago results - as the
group shut factories in the face of tough conditions which caught out rivals
such as Syngenta too - Nufam said that its underlying result had also improved
markedly, by 67% to Aus$19.8m in earnings terms.
Group revenues rose 13.6% to Aus$1.36bn, while operating
profits gained 19.2% to Aus$85.0m, with increases in all but the domestic
market, held back by a dent to margins from a strategy of boosting volumes and
market share, and in Latin America.
Although Nufarm saw an improvement in Latin American sales -
echoing signs of improvement noted by many rivals, fertilizer companies and
farm machinery groups too - it flagged pressure from recovery in Brazil's real,
which resulted in "farmers delaying their purchases of crop protection inputs
in anticipation of price reductions".
Furthermore, it flagged as a "feature of the Brazilian
market" during the half-year period "continued challenges faced by [customers] in
"The company remains vigilant on customer receivables."
Indeed, Nufarm said that for the rest of its financial year,
which ends in July, "cash collections will be a major focus for the company,
along with close management of customer credit and foreign currency exchange
In Argentina too, the group said that its second-half
results would be effects by "negative market conditions", with a weaker peso cutting
contributions, in Australian dollar terms, and rains which prompted the loss of
some soybean crops also preventing agrichemical applications.
"The Argentina business suffered from a delayed season, due
to excessive rainfall.
"This caused growers to delay purchases and created pricing
pressure in the market."
Shares hit seven-year
Nonetheless, with strengthening demand in Europe, and "optimistic"
prospects for the Australian canola sowing season, thanks to good summer rains
in the key producing state of Western Australia, Nufarm forecast full-year
results showing an improvement in operating profits.
Nufarm shares closed up 3.2% at Aus$9.67 in Sydney, earlier
touching Aus$9.96, their highest since January 2010.