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Canola industry provides China update

Canola industry provides China update

Full market access remains blocked, the Canola Council of Canada says

By Diego Flammini
Staff Writer
Farms.com

China continues to hinder shipments of Canadian canola.

“Our market access remains blocked, as it has been since March of 2019,” Brian Innes, vice president of public affairs with the Canola Council of Canada, told Farms.com. “That means two of our largest exporters, Richardson and Viterra, cannot export any canola seed, and that all of our exports must meet very stringent requirements for dockage.”

In March 2020, China agreed to allow imports of Canadian canola seed, so long as the dockage levels were lower than 1 per cent.

2019 statistics from the Canadian Grain Commission indicate dockage levels in Canadian canola ranged from 1.73 to 2.31 per cent.

These restrictions are having significant effects on the sector, Innes said.

“In practical terms, exports have been down between 50 and 75 per cent compared to normal exports to China,” he said.

For context, Canada exported about 4.9 million metric tonnes of canola seed to China in 2018. In 2019 that figure dropped to 1.5 million metric tonnes.

China is still accepting shipments of canola oil and canola meal

Canada exported 871,000 metric tonnes of canola oil and about 1.3 million metric tonnes of canola meal to China in 2019. Those figures are both slightly lower than export figures from 2018.

Despite the issues with China, prices for Canadian canola remain strong. But that doesn’t make up for a lack of open market access, Innes said.

“Because our access is blocked, (farmers) are getting less for their canola than they would if they had full market access,” he said. “But right now, the canola market is very tight, there’s a tight demand sheet globally and farmers are seeing strong prices for their canola. But prices would be higher without these blockages from China.”

Other markets have emerged as customers while the situation with China continues, Innes said.

“The United Arab Emirates continues to be a strong export customer and we’re sending more canola to Europe to use in biofuel,” he said.

Domestic use is also helping support the canola sector.

In March 2019, Canadian facilities crushed 722,322 tonnes of canola seed, Statistics Canada data shows. In November 2020 that number was 917,992 tonnes.

The volumes of canola oil and meal during that time frame also increased.

The Canola Council of Canada continues to communicate with the federal government about the situation with China, Innes said.

And the government remains engaged with Chinese officials.

“Our government remains committed to market access for companies that are blocked from exporting canola seed to China,” Youmy Han, press secretary for Mary Ng, the federal trade minister, told Farms.com in a statement. “To be very clear, Canadian canola seed exports meet China’s import requirements. While canola trade between the two countries continues, the government remains confident that Canada’s current practices for canola production, handling and export, in addition to the oilseed crushing process in China, successfully mitigate plant health risks.”

It’s believed China implemented these barriers to canola seed shipments in response to Canada arresting Huawei executive Meng Wanzhou on Dec. 1, 2018.

Canada made the arrest at the request of the U.S., who charged her with bank and wire fraud.

China has denied the canola issue is related to Wanzhou, citing “dangerous pests” found in shipments.

Wanzhou remains in Canadian custody in British Columbia.


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