Canada Take Note: Canola Shipments to China Will Keep Shrinking
Canada Take Note: Canola Shipments to China Will Keep Shrinking
(Bloomberg) -- Canadian farmers shouldn’t look to China for any recovery in canola sales as more stringent quality checks by the Asian country are set to take a heavy toll on imports in coming months.
Overseas purchases by China, the North American country’s top buyer, will drop “significantly” after it stepped up quality inspections on cargoes from Canada, Tang Ke, a department director at the Agriculture Ministry, said on Wednesday.
The world’s top commodity consumer is hitting Canada where it hurts most. Canola is as Canadian as maple syrup, its name a contraction of “Canada” and “ola.” Prime Minister Justin Trudeau says his country’s product is top quality, and he plans to use diplomatic channels to resolve the ruckus, while the government is also considering an aid package for canola farmers.
Though China has maintained that the drop in purchases is due to quality control issues, industry groups and Canadian executives say the restrictions are likely less about pests and more about the feud surrounding Huawei.
Benchmark futures for canola, also known as rapeseed, have tumbled almost 5 percent in North America this year, while rapeseed oil prices in China have jumped nearly 10 percent.
The drop in canola imports will have little impact on edible oil supplies in China, Tang said, adding there is ample availability of alternative oilseeds.
To contact Bloomberg News staff for this story: Niu Shuping in Beijing at nshuping@bloomberg.net
To contact the editors responsible for this story: Anna Kitanaka at akitanaka@bloomberg.net, James Poole
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