Top Crop Manager

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Canola growers get update on trade with China and COVID-19


April 29, 2020
By Top Crop Manager

Topics

The Canola Council of Canada (CCC) and the Canadian Canola Growers Association (CCGA) partnered on Tuesday to provide an update to Canadian canola growers on trade discussions with China and the impacts of COVID-19 on the industry.

This is the latest in a series of update calls hosted by the CCC and CCGA regarding market access with China, with the situation heading into its 14th month. The meetings now also include updates on COVID-19 as developments become relevant to the canola industry.

Brian Innes, vice-president of public affairs for the CCC, moderated the meeting, with featured speakers Jim Everson, president of the CCC, and Rick White, president and CEO of the CCGA.

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Trade with China

Both Everson and White reiterated that the call between Canada and China on March 30 resulted in the continuation of current trade at about 30 per cent of typical volume, and not the reopening of canola trade to China as was initially reported. The dockage content limit of one per cent continues to be strictly enforced, and canola oil and meal exports are still accepted.

The canola trade permits for Viterra Inc. and Richardson International expired in March, so even if they abided by the one per cent dockage content limits and China were to accept shipments from the two companies, they would not be able to resume shipping in the near future.

Diversification of markets at home and abroad appears to be a central focus for the two organizations. While COVID-19 safety measures have affected the ability to find new markets, Canadian canola is drawing interest from Bangladesh, Pakistan, Europe, and the United Arab Emirates. Trade with the U.S. and Mexico continues to be strong.

On the domestic front, biofuels are the priority. The Canola Working Group, created to tackle the trade dispute with China, has been pushing to increase the national renewable fuel standard to five per cent in diesel as a way to support canola growers. The two presenters also noted that Quebec’s government was in talks to increase the renewable fuel standard provincially, which could provide another opportunity.

In addition to market diversification, improving business risk management programs and plans is also important. Changes to AgriStability were key, according to Everson and White, including the extension of the deadline from April 30 to July 3, and a requested increase of the reference margin to 85 per cent from 70 per cent, with no margin limit. As for AgriInvest, they were petitioning for changes that would see the government contribute up to five per cent (from one per cent), with no matching from the grower.

They emphasized that market access to China was not a quick-fix circumstance, and goes well beyond canola. The issue has more to do with relations between Canada and China generally, with the canola trade troubles a symptom rather than the cause.

COVID-19

The CCC and CCGA, along with other Canadian agricultural groups and senior staff members at Agriculture and Agri-Food Canada (AAFC), are having daily calls on how to handle the pandemic and maintain food supply. They said that, since agriculture had been designated an essential service, resources and inputs for spring planting have kept flowing and seem to be in a good position. At the moment, conditions look good.

One major concern of CCC and CCGA is the possible effects of COVID-19 on the AAFC research community, which the grower groups fund. They are petitioning for research to continue and for field trials to begin as scheduled. The groups hope to work with AAFC to find a solution that protects the research scientists while ensuring that trials continue.

On the agronomic side, growers rely on solutions generated by the research and information provided by AAFC as support in their decision-making during the season.

White noted apologetically that, due to the change to working from home and some of the COVID-19 measures required, the CCGA was behind in processing cash advances, and were working to remedy the situation as quickly as they could.

One of the questions inquired about the flow of agricultural products internationally; the reply was that Canada is working with several other countries through the World Trade Organization (WTO) to ensure that protectionism does not become an issue, and that agricultural products continue to flow.

Another hot topic was the potential risk to processing plants, as experienced by the meat industry currently. While Everson and White noted that this might come to affect the feed grain processing industry at some point, the issues that affect the meat industry – close working quarters, inability to spread out, etc. – are not significant issues in canola processing. As long as processing plants stringently follow safety and prevention advice, there should be no particular problem.

The entirety of the webinar is available to watch on the CCC website, including the question and answer period.