Chinese importer buys first batch of Canadian canola, denting Australia’s export hopes

A Chinese importer has purchased a shipment of Canadian canola shortly after Canadian Prime Minister Mark Carney visited Beijing last week, trade sources said. The move has boosted prospects for Canadian farmers and could potentially lower prices compared with offers from a rival supplier in Australia.

The shipment of Canadian canola, arriving on Panamax vessels of about 60,000 metric tons, is the first since China suspended imports in October and is expected to be shipped after March, two traders with direct knowledge of the deal told Reuters on Monday.

On Friday, Carney said Canada expects China to reduce tariffs on Canadian canola seeds to a combined level of about 15% by March 1 from the current 84%, as part of an initial trade deal that also cuts tariffs on Chinese electric vehicles.

Later that day, China’s Ministry of Commerce said Beijing would adjust its anti-dumping measures on Canadian canola, without elaborating.

“After the Canadian prime minister’s visit, the tariff reduction on Canadian canola has been practically decided. It makes sense to buy now,” said one oilseed trader at an international trading company.

China’s purchases of Canadian canola come as Australia hopes to boost oilseed exports to the world’s largest importer, with state-owned COFCO having bought about 500,000 tonnes of Australian canola in recent months.

China resumed purchases of Australian canola after imposing anti-dumping duties on Canada — its first in about five years — following biosecurity measures that disrupted trade in 2020.

On Monday, Zhengzhou rapeseed meal futures fell 2.4% to their lowest in more than a year on hopes of increased supplies.

China is conducting an anti-dumping investigation into Canadian rapeseed and imposed preliminary duties of 75.8% in August, effectively halting supplies amid a broader diplomatic and trade dispute between the two countries.

The halt in Canadian supplies has paralyzed China’s vast rapeseed processing industry for the first time since 2015, according to consulting firm MySteel.

China’s monthly rapeseed imports fell to zero in October for the first time in two decades, according to trade statistics, and inventories at processing plants fell to zero, MySteel said.

Beijing is expected to make a final decision on the anti-dumping investigation into Canadian rapeseed by March 9.

Rapeseed (canola) is milled for vegetable oil and other products. The protein-rich meal left after milling is used as livestock feed.

Tags: China, Canada, rapeseed