Serious Damage for the Pea Market
For the last few months, our focus in the pea outlook had mostly been on India and what it might do as the February 28 tariff deadline approached. It turns out this wasn’t the biggest issue for the pea market. Last week, China decided to take out its anger about Canada’s tariffs on Chinese electric vehicles, steel and aluminum on Canadian farmers (again). The 100% tariff on Canadian peas was a complete surprise, as China’s retaliation was expected to come through its investigation into Canadian canola dumping announced last fall.
China has been the dominant buyer of Canadian peas ever since India’s last set of tariffs kicked in back in 2017. When India dropped its pea tariffs in 2023/24 and 2024/25, Canadian exports have been more balanced between these two large destinations. The biggest volumes exported to China have been yellow peas but it is also a large buyer of green and maple peas, which are also included in the 100% tariff.
If past behaviour is any indication, the Chinese tariffs won’t go away anytime soon. This means they’ll likely last into 2025/26 and affect next year’s markets. China has been able to find other sources of peas, when it opened its borders to Russian peas in 2023 and just recently to Ukraine. Whether these Black Sea peas will be able to meet the quality specs for the food and fractionation industry remains to be seen.
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