China Trade Situation
The 100% import tariffs China placed on Canadian peas back in March already had a large impact on prices in western Canada. When that announcement came out, yellow pea bids immediately lost $1.25 per bushel and the loss for green peas was even larger at nearly $2.00 per bushel. Prices then went mostly sideways for the next few months until seasonal tendencies this summer took them even lower.
Now, the focus is on the situation in the 2025/26 market year and possibilities for exports and the impact on supplies. For the most part, I’m a fairly optimistic person but I’m having a hard time finding a silver lining for the coming year. It’s always possible that some negotiations are going on behind the scenes but on the surface, there doesn’t seem to be anything new in the pea tariff situation. On the other hand, China just announced 76% tariffs on Canadian canola after Ottawa placed additional tariffs on Chinese steel. It seems trade tensions between the two countries are rising rather than easing.
If China’s pea tariffs are going to remain in place, we need to look at the implications for the Canadian pea balance sheet. For the supply side, Canadian pea supplies could easily top 4.0 mln tonnes in 2025/26, 750-800,000 tonnes more than last year. If that’s the case, pea exports this year need to increase considerably to avoid extremely burdensome supplies. If the Chinese market is lost however, it would mean a lot fewer exports, exactly the opposite of what’s needed.
When we look specifically at yellow peas (2023/24 is the last complete year without tariffs), we see that China accounted for nearly half of Canadian exports. While some other countries will likely step in to increase purchases, none of them would be able to replace the nearly 900,000 tonnes of demand. Thus, the Chinese tariffs would seriously curtail yellow pea exports and cause a buildup in supplies.
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