Who Will Replace Canada in China’s Canola Market?

The oilseed market has been rocked once again by China’s decision to impose a preliminary anti-dumping duty of 75.8% on Canadian canola. The measure, which comes into effect on Thursday, effectively cuts off the world’s largest canola importer from its main supplier, raising the question of where Beijing will find the millions of tonnes of raw material needed to produce feed (especially in aquaculture) and vegetable oil.

The Chinese Commerce Ministry’s decision was a response to a year-long trade dispute that Canada started with tariffs on Chinese electric vehicles. For Canadian exporters who shipped CAD 5 billion (USD 3.64 billion) worth of canola to China in 2024, this is a disaster, says Chris Davison, president of the Canola Council of Canada, who says the Chinese market is closed to them.

According to Reuters, November canola futures on the ICE fell by 6.5%, reaching a four-month low. The pressure on prices is also increasing due to expectations of a record Canadian harvest.

Analysts are unanimous: it is extremely difficult to replace millions of tonnes of Canadian canola in a short time and offer a number of alternative purchasing destinations.

The world’s second largest exporter of rapeseed is Australia. However, since 2020, the country has had virtually no access to the Chinese market due to phytosanitary restrictions. Some experts see a chance for the country to resume deliveries with trial batches, but it will be very difficult to completely replace Canadian rapeseed unless demand for imports drops sharply.

Perhaps China will try to increase imports of other oilseeds (soybeans, sunflower) or rapeseed from other regions, such as the EU and Ukraine, which could create a demand flow and affect global prices, experts say. However, the rate of rapeseed export from the country in July of this year was the lowest in the last three years. The Ukrainian market is expecting a 10% export duty, which sharply reduces competition and puts pressure on domestic prices.

Tags: Ukraine, China, EU, Canada, rapeseed