China’s government has taken aggressive steps to curb food price inflation but there are conflicting reports on whether that is slashing demand for Canadian crops and meat.
A pork export leader says Chinese demand is unabated but a canola export expert says there are signs that trade is slumping.
“It’s happening,” said Don Roberts of Ag Commodity Research about trade apparently slowing after China tried to cap domestic vegetable oil prices.
“We haven’t sold any canola to China for months.”
Read Also
Going beyond “Resistant” on crop seed labels
Variety resistance is getting more specific on crop disease pathogens, but that information must be conveyed in a way that actually helps producers make rotation decisions.
However, pork trade is expanding from the frozen and offal products that the Chinese often buy, to include higher value areas, including chilled pork.
“There is no sign of that,” said Canada Pork International executive director Jacques Pomerleau about any evidence of weakening pork demand.
“We are seeing that the market is changing, and become more refined.”
China is a key market for many prairie commodities. Its growing demand has underpinned the commodity rally that has helped drive crop prices high.
Recently, the Chinese government has taken repeated steps to slow its galloping food price inflation, including limiting bottled vegetable oil prices and releasing vegetable oil stockpiles to the market at low prices.
Roberts said the lack of new canola sales to China, including seed, oil and meal, is also partly due to its ports becoming plugged with imports.
“Some of these Chinese ports are chock-a-block with canola meal exports from Canada,” said Roberts.
But he thinks administrative hurdles recently imposed are part of the attempt to control food trade, and Chinese importers have no incentive to import canola products because of the bottled oil price capping.
“It’s kind of a mess,” he said. “They’ve backed off on their buying.”
Roberts speculates that Beijing will attempt to restrain food prices until after the Chinese New Year’s festival.
“The big question right now is are they just delaying the inevitable,” said Roberts.
“But I think there is a concerted effort on their part to keep vegetable oil prices under control.”
Canola Council of Canada president Joanne Buth said she had not heard complaints from industry about the Chinese actions.
Pomerleau thinks China will continue to import pork because of its people’s appetite for the meat and because China has begun importing feed, which makes importing meat comparatively cheaper.
“This year is very pivotal,” he said.
