Possible trade barrier lowers canola price

Reading Time: 2 minutes

Published: October 22, 2009

News of a possible trade barrier with China slammed the canola market Thursday, knocking November futures prices down by $16.10 per tonne.

The Canola Council of Canada says China sent a letter to the Canadian Food Inspection Agency saying it will not accept as of Nov. 15 Canadian canola seed without a certificate showing it is free of the plant disease blackleg.

China has filed a similar requirement with Australia.

The council doesn’t know why China would want this guarantee on seed destined for processing because it is not a human health issue.

Blackleg is a common plant disease around the world, including China. Varieties grown in Western Canada have resistance to the disease.

China is an irregular importer of Canadian canola, some years taking little and other years a lot.

Last year, exports exploded as China bought a record 2.8 million tonnes.

Shipments were expected to be less this year but still large, and not being able to access the Chinese market would make it difficult to reach Agriculture Canada’s forecast of six million tonnes of exports.

The canola council is working through the Canadian government to negotiate a delay on the stop-shipment date, Reuters News Service reported.

November canola settled at $383.30, down $16.10 on a volume of 4,552 trades.

January closed down $14.50 at $391.50 on 13,539 trades.

March was down $12.20 at $399.50 on 1,624 trades.

The Saskatchewan crop report released Thursday said almost no advance had been in the harvest in the last week. About 34 percent of the canola was still in the field.

The Canadian dollar fell to 95.37 cents US at noon on Thursday, down from 96.04 cents on Wednesday.

The U.S. dollar was $1.0485 Cdn compared to $1.0412 on Wednesday.

November barley had another strong day, rising $5.50 to $165 per tonne, thanks largely to the rally in wheat and corn. January barley rose $1.40 to $162.

U.S. wheat futures rose on rain that is slowing the seeding of the winter wheat crop.

Crude oil in New York fell 18 cents to close at $81.19 US per barrel.

explore

Stories from our other publications