Bad News for Canadian Farmers as China’s Canola Imports Set to Drop Even More

Canadian farmers shouldn’t look to China for any recovery in canola sales as more stringent quality checks by the Asian country are set to take a heavy toll on imports in coming months

Overseas purchases by China, the North American country’s top buyer, will drop “significantly” after it stepped up quality inspections on cargoes from Canada, Tang Ke, a department director at the Agriculture Ministry, said on Wednesday.

Ties between the two nations have deteriorated after Canada detained a Huawei Technologies Co. executive in December at the behest of the U.S., drawing China’s wrath. Since then, China has detained Canadians on national security grounds, and revoked canola import licenses, citing pest infestations.

“The world’s top commodity consumer is hitting Canada where it hurts most”

 

The world’s top commodity consumer is hitting Canada where it hurts most. Canola is as Canadian as maple syrup, its name a contraction of “Canada” and “ola.” Prime Minister Justin Trudeau says his country’s product is top quality, and he plans to use diplomatic channels to resolve the ruckus, while the government is also considering an aid package for canola farmers.

Though China has maintained that the drop in purchases is due to quality control issues, industry groups and Canadian executives say the restrictions are likely less about pests and more about the feud surrounding Huawei.

Benchmark futures for canola, also known as rapeseed, have tumbled almost 5 per cent in North America this year, while rapeseed oil prices in China have jumped nearly 10 per cent.

The drop in canola imports will have little impact on edible oil supplies in China, Tang said, adding there is ample availability of alternative oilseeds.

Source: Bloomberg