Sector hopes to contain canola ban

MONTREAL — Farmers and the rest of the canola industry are watching anxiously to see if China extends an import ban beyond Richardson International.

As of late March 11, only Richardson had reported losing its China import licence, but other grain companies and exporters had reported sales bogging down for a few months.

Richardson vice-president Jean-Marc Ruest said in an interview late March 11 that China had also mentioned other Canadian exporters in its complaints.

“This issue has been brewing for a few months, where the CFIA would receive these notes of non-compliance,” said Ruest.

Richardson is now caught in the position of wondering if it is in the middle of a diplomatic dispute over which it has little control.

“If it’s not quality, if it’s a bigger issue, there’s not much we can do,” said Ruest.

“We’re very confident with the quality of our shipments. We’ve been exporting for decades without any type of an issue in China or anywhere else in the world. We haven’t had any complaints.”

Canola Council of Canada president Jim Everson said March 11 that the industry hopes to see the situation contained.

“We’re concerned that the issues that China is raising with one company could be a concern with other companies,” said Everson.

China’s import authorities have listed weeds and an official has referred to “hazardous pests” as the reason for the Richardson suspension. Richardson learned of the decision on March 1.

China has not said the suspension is connected to the diplomatic row engulfing Canada-China relations today. China has been angry with Canada since early December, when an executive with Chinese technology giant Huawei was arrested in Vancouver on a U.S. extradition warrant.

Meng Wanzhou now awaits an extradition hearing, which is expected to take months.

Federal cabinet ministers have been careful to not directly allege a political motivation, although both Foreign Affairs Minister Chrystia Freeland and Agriculture Minister Marie-Claude Bibeau noted that the quality problems mentioned by China do not match the samples kept in Canada from the shipment in question.

“I have tremendous confidence in the quality of Canadian canola,” said Freeland.

On March 6, Chinese foreign ministry spokesperson Lu Kang said that pests were frequently found in recent samples of Canadian canola.

“In one company’s imports the problem was particularly serious,” said Lu during a briefing.

News of the Richardson suspension follows weeks of rumours in the markets that Canadian canola shipments were becoming delayed, something many market analysts credited for the slumping price of canola through February, in which nearby canola futures fell from almost $500 per tonne to about $460. The China news drove it down into the mid-$450s.

The China issue was front and centre at the Canadian Crops Convention, held March 5-7 in Montreal.

Many canola players drew a straight line between the Huawei dispute and the suspension, but others suggested the situation shouldn’t be assumed to be political.

China is a huge nation with complex bureaucracies, multiple authorities and agencies. The import authority might have acted independently.

At times China has been suspected of using quality issues as non-tariff trade barriers when trying to raise domestic crop prices.

Council and industry leaders said they saw the issue as something for everybody in the industry to worry about, and to try to resolve as one.But while many expressed hopes that the canola blockage would not spread beyond Richardson, others mentioned darkly that things “were likely to get worse before getting better.”

With China taking about 40 percent of Canada’s canola exports, any slowing, disruption or cancellation of sales is costly for farmers. Everson said other canola shipments and sales made before the Richardson situation developed appear to be proceeding, but new business is shrinking back.

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