If the Chinese government was hoping to cap Canadian canola exports to China, it appears to have succeeded.
Canadian canola exports to the nation are running at a rate far beneath the levels of last spring and early this crop year and have levelled out with little ability to increase.
China banned Canadian canola at 70 percent of its ports last November due to a sudden phobia about blackleg, a common field disease that is present in virtually all canola produced in Canada.
Most in the Canadian canola industry have seen the Chinese restrictions on Canadian canola imports – allowing them only into ports in regions of China that do not grow canola or rapeseed – as a non-tariff trade barrier used to boost domestic farmgate prices for Chinese farmers.
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According to analysts, the Chinese government set relatively high canola and rapeseed domestic prices, so its crushers began bringing in foreign canola instead. That caused Chinese canola and rapeseed stocks to bulge and provoked the government to stop its processors from avoiding expensive domestic oilseeds.
Regardless of the motivation of the Chinese government’s restrictions, the port limitations have stopped China from becoming the saviour it was in 2008-09, when its surge of buying in April, May and June 2009 drew down large stocks of canola in Canada. In those three months, China sucked out more than a million tonnes of canola.
Over the course of 2008-09, China imported almost three million tonnes of Canadian canola.
That appears impossible this crop year, but not because the demand hasn’t been there.
The surge of sales that reached China in October and November suggested a winter of booming sales.Then the ports closed.
China has been importing Canadian canola semi-directly, by importing larger amounts of canola oil than it usually does, but the port restrictions are holding Canadian seed exports to about 120,000 tonnes per month, a rate that’s held from January to March, according to Canadian Grain Commission statistics.
By historical standards, Canada’s canola exports to China will appear to be large in the 2009-10 crop year.
In March, they were at almost exactly the same level they were the previous year, at almost 1.5 million tonnes.
But then came the surge of sales in April-June, pushing the year into a record, which will not be possible this year, regardless of underlying Chinese demand.
And historical export statistics do not reveal the lost potential of 2009-10 or the possible reality of China’s emergence as a consistent buyer of Canadian canola.
