Chinese importer buys Canadian canola, denting Australian export hopes

[BEIJING/SINGAPORE] A Chinese importer bought a cargo of Canadian canola shortly after Canadian Prime Minister Mark Carney’s visit to Beijing from Jan 14 to 17, trader sources said, boosting prospects for Canadian farmers and potentially undercutting sales by rival supplier Australia.

The Panamax cargo of about 60,000 tonnes of Canadian canola is the first since China halted imports in October, and is expected to be shipped after March, two traders with direct knowledge of the deal said on Monday (Jan 19).

On Friday, Carney said that Canada expects China to cut tariffs on Canadian canola seed to a combined rate of about 15 per cent by Mar 1 from 84 per cent currently, as part of an initial trade deal that also reduces the tariffs on Chinese electric vehicles.

China’s commerce ministry said later on the same day that Beijing would adjust its anti-dumping measures on Canadian rapeseed, without elaborating.

“Lower duty on Canadian canola is almost a done deal after the Canadian PM visit. It makes sense to buy now,” said one oilseed trader at an international trading company.

The Chinese purchase of Canadian canola comes as Australia had been hoping to lift oilseed exports to the world’s largest importer, with state-owned COFCO buying about 500,000 tonnes of Australian canola in recent months.

China’s purchases of Australian canola resumed after it imposed anti-dumping duties on Canada, the first in about five years, following biosecurity curbs that derailed trade in 2020.

Zhengzhou Commodity Exchange’s Rapeseed Meal Futures fell 2.4 per cent to a more than one-year low on Monday, on the hopes of higher supplies.

China Canadian canola import collapse

China has been conducting an anti-dumping probe into Canadian canola and imposed preliminary duties of 75.8 per cent in August, effectively halting shipments amid a wider diplomatic and trade dispute between the two countries.

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The halt in Canadian shipments has brought China’s vast canola crushing industry to a standstill for the first time since at least 2015, indicated data from consultancy MySteel.

The monthly Chinese canola imports fell to zero in October for the first time in two decades, trade data showed, and inventories at crushing plants have fallen to nothing, MySteel said.

Beijing is expected to make a final ruling in its anti-dumping investigation on Canadian canola before Mar 9.

Canola, or rapeseed, is crushed to produce cooking oil and other products. The protein-rich meal left behind in the crushing process is used as livestock feed. REUTERS