China suspended licenses for Richardson International and Viterra Inc. in 2019, alleging pests in shipments
By Diego Flammini
Canadian canola can once again enter China.
Trade Minister Mary Ng and Agriculture Minister Marie-Claude Bibeau issued a joint statement on May 18 signaling exports of Canadian canola to China can restart.
“Canada has been advised that China has reinstated access to its market for two Canadian companies that China Customs had suspended from exporting canola seed to China since March 2019,” the ministers said in their statement. “We welcome this decision to remove the restrictions and immediately reinstate the two companies to allow them to export Canadian canola seeds.”
The companies the ministers referred to are Richardson International and Viterra Inc.
China suspended the licenses from those two companies alleging pests in shipments.
Though many believe China originally suspended the licenses following Canada’s arrest of Huawei Chief Operating Officer Meng Wanzhou in December 2018.
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.
Industry groups welcomed the news about Canadian canola and reinstated access to China.
Canada exports a majority of its canola, and China plays an important role in that, said Mike Ammeter, chair of the Canadian Canola Growers Association.
“With 90 per cent of canola exported, open and predictable trade is fundamental to the success of the canola sector,” he said in a statement. “Farmers look forward to strengthening the Canada-China relationship and growing this important agriculture market for canola.”
Market prices didn’t move upon learning of the resumed canola trade with China.
Canola stocks are low and the planting season is delayed, said Moe Agostino, chief commodity strategist with Farms.com Risk Management.
“Western Canada has no canola to export and the 2022 planting season is turning into a train wreck as it’s just too wet,” he said.
But China could target Canadian canola again in retaliation to another issue regarding Huawei.
The federal government has banned Huawei and ZTE from the country’s 5G telecommunications network. And Canadian telecommunications companies must remove all Huwaei or ZTE equipment by 2024.
“China could retaliate” by restricting Canadian exports of canola, Agostino said.
China has a history of targeting trade with other countries in response to bilateral issues.
In 2010, China suspended trade with Norway and restricted salmon imports after Liu Xiaobo, a Chinese political prisoner, won the Nobel Peace Prize. The two countries repaired their relationship in 2016.
In 2019, China restricted imports of Australian coal after the country banned Huawei from its 5G network due to security concerns.
And in March 2021, China banned imports of Taiwanese pineapples citing pest issues, though Taiwanese officials claimed no pest problems.