Nervous canola farmers worried that this year’s harvest may not have access to the lucrative Chinese market can breathe easier.
After months of discussion, including daily bureaucratic negotiations, a Sept. 1 deadline to reduce the amount of dockage in Canadian canola shipments has been delayed, at least for now.
China has agreed to retain the current level level of 2.5 percent until officials on both sides can negotiate a more permanent solution, International Trade Minister Chyrstia Freeland, whose father still grows canola, told Canadian Press.
Freeland was in China with Prime Minister Justin Trudeau during his first official trip Aug. 30 to Sept. 7. The visit also coincided with this year’s G20 meeting.
Canada is the world’s largest exporter of canola, with 42 percent of seed exports destined for the Chinese market, valued at about $2 billion.
Canada and China have been arguing over canola dockage levels, and ways to prevent the spread of blackleg for years. The disagreement came to a head in February, when Chinese regulators an-nounced as of April they would only accept shipments where the amount of foreign material in canola shipments was less than one percent. The April deadline was later extended to Sept. 1.
But while current levels and imports will continue, canola market access should not be dropped from Ottawa’s policy agenda.
The past few months have highlighted how dependent Canada is on the Chinese market.
While some market alternatives exist, notably countries like the United Arab Emirates and Pakistan, industry has said none of those markets compare to China. Nor is Canada’s bulk grain handling system designed to easily adapt to individual demands from shippers and buyers.
Canola is a highly lucrative crop for Canadian farmers, one that typically brings in high income and forms a critical part of the cash flow. Acreage has increased, as have yields. Farmers this year expect to harvest the second largest crop on record.
However, if alternative markets or additional domestic processing space (Canadian canola crush plants are already at near capacity) cannot be found, Canadian farmers, who are already facing weaker commodity markets, may consider growing other crops.
The Liberals have pledged to continue seeking new market access for Canadian goods. They have also committed to investing in value-added processing, two promises that have taken on added importance by this latest trade spat.
Both the prime minister and trade minister Freeland planned to raise market access for canola, officials said during a technical briefing leading up to the China visit.
It’s safe to say the outcomes will be closely watched by industry and farmers alike.