The national voice for Canada’s canola industry knows nothing about a company that signed a $1 billion deal to ship Canadian canola oil to China.
Prime minister Stephen Harper and federal agriculture minister Gerry Ritz recently returned from a trade mission to China, where they witnessed LeMine Investment Group sign an agreement to ship $1 billion of canola oil to China over the next seven years.
LeMine is an Ontario condominium developer that appears to have come out of nowhere to become one of the largest suppliers of Canadian canola oil to the second largest buyer of the product behind the United States.
“I don’t know anything about this company or this specific transaction,” said Patti Miller, president of the Canola Council of Canada.
She said the council doesn’t get involved in commercial transactions, but it seems odd that the national voice for the canola industry has never heard of a company that will be exporting such an amount of oil.
“Just because we’re not aware of somebody’s involvement doesn’t necessarily mean it’s a strange deal, but I don’t know who they are,” said Miller.
To put the deal in perspective, Canada’s entire canola oil export program to China last year was 885,180 tonnes, worth $1.06 billion.
“China is one of our most important customers and this agreement ensures that they will continue to be a very promising and consistent market,” said Miller.
LeMine was contacted for this story but the company’s senior executives were in China and unable to comment.
The company intends to host a news conference in Toronto in early December to discuss the deal.
LeMine provided a translated version of a Chinese news release about the deal. It was scant on details but said the deal is between LeMine and Guizhou Fengguan Group.
The Canadian canola oil will be sold through Guizhou Fengguan Group’s 416 Walmart supermarkets and 746 Fengguan Home Shops in China.
Miller was also excited about the establishment of the China-Canada Economic and Financial Strategic Dialogue, which will deepen trade and investment between the two countries.
“This is a helpful step towards increased economic co-operation that could facilitate better market access for Canadian canola,” she said.
Miller said it is nice to have a regular forum involving senior government officials where the canola industry can raise ongoing market access and trade policy issues, such as China’s modernization of its food and feed safety regulations and its certification of Canadian processing plants and products.
In the meantime, Canadian canola and other oil could be facing market access issues in India.
Reuters is reporting that India’s food ministry wants to double the import tax on crude edible oils to five percent and boost the tax on refined oils to 15 percent from 10 percent.
The ministry is waiting for feedback on the proposal from other ministries before sending it to cabinet for approval.
“If that is something that is being considered actively in India, then it’s something we would want to talk with our government about and try to make changes there,” said Miller.
India is not a big buyer of Canadian canola oil, but the council thinks it could become one.
India is the world’s largest importer of vegetable oil, mostly palm, soybean and sunflower oil. However, the council believes there will be a growing market for healthier oil because of the rapidly expanding middle class and the high rates of coronary disease.