Souring bilateral ties to hit Canada’s canola exports to China

Shipments of canola, a major Canadian commodity export to China, are expected to decline further this year after a fall in 2019 amid souring bilateral relations, experts told the Global Times Thursday.

Canadian canola exporters had hoped for greater predictability, but those hopes dimmed after a Canadian court ruling against Huawei CFO Meng Wanzhou, which sparked a new wave of indignation among Chinese public, experts noted.

China imported 247,100 tons of canola seeds in April, customs figures show, up 11.4 percent month-on-month to the highest level so far this year.

Canada remained the largest source, taking up 75.1 percent with 185,500 tons, followed by Australia with 40,900 tons and Russia with 18,600 tons.

The increase in April was mainly due to stockpile releases after the first quarter, when China took strict measures to check the spread of the coronavirus and imports at ports decreased, said Jiao Shanwei, editor-in-chief of cngrain.com, a website specializing in grain news.

“Canadian canola exports to China had accounted for as much as 95 percent of the latter’s total imports, so a 75-percent share would indicate a shrinking trend, even though Canada remains the largest source,” said Jiao.

Canola exports to China fell about 70 percent in 2019 due to trade disruptions, resulting in an estimated $1 billion in lost revenue, data from the Canola Council of Canada showed.

Previously, China had accounted for approximately 40 percent of all Canadian canola seed, oil and meal exports. Canola seed exports to China were worth $2.7 billion in 2018, according to the council.

Three Canadian canola companies were suspended to export to China in March 2019. After the detection of pest contamination in their products, two biggest Canadian exporters were blocked. A third canola exporter, Richardson International, received a non-compliance notice from China over quality concerns in the following month. The ban on Canadian canola imports was “in accordance with laws and regulations and international practice,” as such imports contained harmful and dangerous pests, according to China’s Foreign Ministry.