China has banned imports of oilseed meal from India, creating a soybean and canola meal export opportunity in one of the world’s largest meal markets.
The ban, which was implemented Jan. 1, is due to the detection of malachite green in rapeseed meal shipments from India.
Malachite green is a hazardous chemical used in dyes.
China warned India about the issue last June. The warning prompted India’s agriculture and commerce ministries to conduct a study in conjunction with the Solvent Extractors Association of India.
The study concluded the contamination stemmed from the use of a green dye to mark jute bags containing the rapeseed meal.
India exported 344,140 tonnes of oilseed meal to China between April and December 2011, 79 percent of which was rapeseed meal.
Removing India from the list of eligible exporters leaves a big void for a country that imported 2.87 million tonnes of oilseed meal in 2009-10, half of which was rapeseed meal.
“Canola will certainly get a piece of that, but we’d likely see soybeans get a big piece of that as well,” said Cory McArthur, vice-president of market development with the Canola Council of Canada.
Canola meal is priced higher than rapeseed meal, which makes McArthur wonder if there will be much substitution.
“I don’t know how significant it necessarily will be,” he said. “Time will tell.”
McArthur hasn’t yet seen a bump in canola meal exports to China be-cause of the ban, but the council has been doing a lot of market development work in that country.
Feeding trials conducted in conjunction with China’s five largest dairy firms, which account for 75 percent of the country’s dairy production, helped convince Chinese nutritionists there are no feed intake issues with canola meal.
They were skeptical because cows tend to reject bitter-tasting rapeseed meal.
One company realized feed cost savings of $1 million by incorporating the ingredient in feed rations, and two companies witnessed a 0.5 to one kilogram per cow per day increase in milk production.
“Our momentum certainly from a meal standpoint is strong already, so this (Indian ban) can only enhance that,” said McArthur.