China to resume imports of Canadian canola, sources say [updated with CCC statement]
March 31, 2020 By Top Crop Manager
Ending a trade ban that began in March 2019 and halted $2 billion worth of trade, China has agreed to allow imports of Canadian canola to resume according to the Financial Post and two unnamed sources through Reuters.
The agreement was reached on Monday during a call held by China’s customs administration and Canada’s farm ministry on Tuesday, said the sources who declined to be named because of the sensitivity of the matter.
Neither China’s General Administration of Customs nor the office of Minister of Agriculture Marie-Claude Bibeau were available for comment at the time of publishing. Until official confirmation is made, the full details of the ban being lifted are unknown, but the situation seems promising.
The move to allow imports to resume comes as China’s oilseed processors struggle with the lowest soybean stocks since at least 2010, and as the coronavirus pandemic disrupts the global supply chain of farm produce.
Canola, like soybeans, is crushed into protein-rich meal for animal feed and Canada is the world’s top supplier.
The ban on Canadian canola was due to quality issues, according to Beijing, but it came amid tense relations with Ottawa, triggered by Canada’s detention of a top Huawei Technologies executive. Canola producers and groups have expressed concerns that they were being punished for political issues beyond their control, and earlier this year petitioned Ottawa to prioritize a quick resolution to the trade dispute.
While the ban being lifted is good news, it doesn’t mean that trade will flow as it once did immediately. Chinese traders are hesitant to resume canola imports after being caught in the trade disputes between China and Canadian grain suppliers over the past two years. It remains to be seen how trade relations will function following the year-long ban.
The two sides also agreed that the percentage of foreign materials in the canola shipments must be below one per cent, the sources added in speaking with Reuters. A standard on foreign materials had been in place prior to the ban but not strictly implemented in the past, buyers said to the Financial Post.
“If the standard on foreign materials is implemented strictly, it will surely take longer to offload the canola cargoes that arrive,” said a manager with a Chinese crusher that used to crush Canadian canola before the ban to the Financial Post.
He added that he believed it would be hard for shipments to meet the standard unless Canada significantly tightened up inspections.
UPDATE: The Canola Council of Canada (CCC) released a statement on Tuesday afternoon in reference to the potential lifting of the canola ban:
“Recent discussions between the governments of Canada and China have resulted in some media regarding the trade in canola. The Canola Council of Canada has the following statement:
- The world remains gripped by the COVID-19 pandemic and global supply chains to feed people and animals are more important than ever.
- Canadian and Chinese government officials had a call to discuss the trade in canola seed on March 30.
- China has informed Canada that the current trade in canola seed can continue.
- Canola shipments to China remain blocked as the licenses of two large exporters, Richardson and Viterra, to export canola seed to China remain suspended.
- Canada has been shipping about 30 per cent of normal canola seed exports to China since March 2019.”