Business & Policy
China’s Canadian canola ban reaches one-year mark
March 10, 2020 By Top Crop Manager
The one-year anniversary of China’s ban on Canadian canola has come and gone, with little hope of resolving the issue in the near future.
On March 1, 2019, China suspended the export permit of Richardson International Ltd., blocking the Winnipeg-based company from sending canola shipments to Chinese markets, citing non-compliance with its plant health requirements. Agriculture and Agri-Food Canada (AAFC) noted that at the same time China strengthened its inspection measures on all Canadian canola seed shipments.
These moves – which were followed by bans against all Canadian canola exporters – were seen as part of the diplomatic battle between the countries that also featured Canada’s arrest of a Huawei executive on behalf of the United States.
Now, more than a year later, Canadian canola producers are still shut out of the Chinese market.
The Canola Council of Canada (CCC) has called on the Canadian government to resolve the trade dispute and support industry diversification – abroad, by improving access to Asian markets; at home, by increasing the use of biofuels. Canola growers and the industry are bearing the brunt of the dispute with no control of the outcome, says CCC president Jim Everson.
According to the CCC, canola seed exports to China were down approximately 70% in 2019 due to trade disruptions, resulting in an estimated C$1 billion in lost revenue from canola. Prior to last year’s market access challenges, China accounted for approximately 40% of all Canadian canola seed, oil and meal exports.
This, combined with sinking canola futures hitting new all-time lows as coronavirus fears destabilize the global economy, has understandably hit the canola industry hard at all levels.
There has been some good news on the canola front over the past year, however.
Canada has increased its exports to countries like Bangladesh and the United Arab Emirates and to nations in the European Union. As well, crushing plants in Saskatchewan have been busy, so demand has been acceptable.
The problem isn’t so much that producers aren’t able to sell their canola, but that the current price of around $10 per bushel isn’t going to keep producers from feeling a financial pinch. With their other costs increasing, producers need the price of canola to increase – which likely would happen if the Chinese market reopened.
Canola exporters and the CCC are working to diversify exports into new markets, especially in fast-growing markets in Asia, and are urging the federal government to commit additional resources to these markets and to coordinate with industry and the provinces to support market access.