UPDATE: China, Canada discuss continuation of reduced canola seed trade

Editor’s note:

Readers, earlier this morning, we posted a Reuters News Service story that indicated that China had lifted the ban on Canadian canola, along with an agreement to reduce dockage in Canadian canola to one percent.

The Western Producer’s journalists have now confirmed that the story is not accurate.

We have taken down that story, our update is immediately below. An updated Reuters story is below that.

Brian MacLeod, Editor, The Western Producer.

UPDATE: No change in canola access to China – March 31, 2020 – 1200 CST

By Western Producer Staff

Media reports suggesting that China has lifted a year-old ban on shipments of Canadian canola are inaccurate, according to source in the office of Canada’s federal agriculture minister.

Oliver Anderson, director of communications for federal agriculture minister Marie-Claude Bibeau, said this morning that Canadian canola exporters, including Viterra and Richardson, are still subject to trade restrictions that have effectively limited Canada’s canola trade with China to 30 percent of pre-2019 levels.

“They (China) have not relisted Viterra and Richardson, although there are definitely ongoing positive conversations with the Chinese,” Oliver told the Western Producer March 31.

“They have outlined a bit of a path forward for — in a technical nature — how to normalize trade with those companies but they are still delisted.”

Earlier today, a story posted by Reuters News Agency suggested that China had agreed to lift restrictions on imports of Canadian canola.

The story, which carried a Beijing place line, listed two unnamed sources and said China had agreed to lift a ban that had been in place since March 2019 and had resulted in the loss of $2 billion worth of canola trade between the two countries.

However, Anderson said the situation had been misreported by Reuters.

“I guess their (Reuters’) China office received some incorrect information. I’m not going to speculate on what happened there,” Oliver said.

Confusion over the Canada-China canola situation may have stemmed from a recent call that took place between Canadian and Chinese officials, he added.

About three years ago, Chinese and Canadian trade officials signed a memorandum of understanding (MOU) pertaining to dockage levels in Canadian canola.

At the time, Chinese officials had raised concerns about the presence of blackleg, a common canola disease, in commercial canola shipments.

Chinese officials urged Canada to reduce dockage levels in canola shipments to a level of one percent as a means of reducing the risk of blackleg.

A MOU to that effect was signed in March 2017 and was due to expire on March 31, 2020.

The anticipated expiry of the 2017 MOU prompted a recent conversation between Canadian and Chinese officials, in which Chinese authorities confirmed that they will “permit the continuation of trade in Canadian canola seed at the one percent (dockage) level.”

However, the agreement does not remove other trade restrictions that have affected Canadian canola shipments.

There was no deal to lift broader trade restrictions affecting Canada’s canola trade with China, Anderson said.

In its story, Reuters said that China’s General Administration of Customs could not be reached for comment after office hours.

Bibeau’s office did not immediately respond to a request for comment, Reuters added.

Speculation about the normalization in Canada’s agricultural trade with China comes as China’s oilseed processors struggle with the lowest soybean stocks since 2010 and as the coronavirus pandemic disrupts the global supply chain of farm produce.

“The market is worried about oilseed supplies. And there is no energy left for any (trade) fights now,” said one unnamed who was source quoted in the Reuters story.

In 2018, Canada exported $2.7 billion worth of canola seed to China, a market that accounted for approximately 40 percent of all Canadian canola exports.

The Canola Council of Canada also confirmed that while a call between Canadian and Chinese trade officials did take place on March 30, the export licenses of Viterra and Richardson remain suspended.

“Canola shipments to China remain blocked as the licenses of two large exporters, Richardson and Viterra, to export canola seed to

China remain suspended,” the canola council said in a written statement.

— With files from Reuters


Latest update from Reuters – 1059 CST – OTTAWA/BEIJING, March 31 (Reuters) – Canada and China are in talks to ensure limited Canadian canola seed exports continue even as a year-long trade dispute remained.

Beijing blocked canola seed shipments from Richardson International and Viterra Inc last year, citing pest concerns. China’s move came after Canada’s detention of a top Huawei Technologies Co Ltd executive.

Canadian canola seed shipments from other companies to China have continued but were in jeopardy due to the March 31 expiration of an agreed standard on the amount of foreign material allowed per shipment.

Officials from China’s customs administration and Canada’s farm ministry spoke on Tuesday, two sources said.

No contracts between Canadian canola exporters and Chinese buyers have been signed in the past two to three weeks, a Canadian government source said on Tuesday, as industry participants waited to hear whether a new standard could be reached.

“We’ve seen promising signs of positive relations on specific issues,” Canadian Prime Minister Justin Trudeau told reporters on Tuesday, asked about progress on canola trade with China. “We’re going to continue working to try and ensure that our farmers, our manufacturers, our exporters, continue to have access to the markets around the world even in this difficult time.”

While Chinese sources have suggested that all canola seed imports would resume, a Canadian government source said that no agreement had been reached to allow the top two exporters back into the market.

Discussions between Canadian and Chinese officials continue, the source said. Chinese authorities have indicated Canadian canola seed shipments may continue to be shipped provided the amount of foreign material is limited to less than 1% of the shipment, the source said.

Richardson and Viterra continue to be blocked from exporting canola seed to China.

Richardson spokesman Jean-Marc Ruest said the company had no details about recent Canada-China discussions. Viterra spokesman Peter Flengeris could not immediately comment.

Canola, like soybeans, is crushed into protein-rich meal for animal feed and Canada is the world’s top supplier. ICE canola futures edged higher on Tuesday.

China’s General Administration of Customs was unavailable for comment after office hours. Canadian Agriculture Minister Marie-Claude Bibeau did not immediately comment.

China’s oilseed processors have struggled with the lowest soybean stocks since at least 2010, as the coronavirus pandemic disrupts the global supply chain of farm produce.

“The market is worried about oilseed supplies. And there is no energy left for any (trade) fights now,” said another source with a major agriculture products importer.

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