The Canola Council of Canada remains committed to regaining full access to the Chinese market for Canada’s canola seed.
“Our priority is certainly to restore full trade and have all Canadian exporters included in that trade and we will keep working on this file until full trade is restored,” Jim Everson said during a webinar April 28 updating canola issues, including trade with China.
In March 2019 permits allowing Canada’s two biggest grain companies — Richardson International and Viterra — to export canola seed to China were suspended by the Chinese government.
China claimed Canadian canola seed was contaminated with blackleg (disease) and weed seeds — an allegation the Canadian Food Inspection Agency claimed had no merit.
It’s widely believed China’s actions were designed to punish Canada for its December 2018 arrest of Meng Wanzhou, vice-president of Chinese technology firm Huawei, at the United States’ request.
China had been Canada’s best canola seed customer having imported 4.8 million tonnes worth $2.7 billion in 2017-18.
Since then canola seed exports to China are about 30 per cent of what they had been, Everson said.
While seed sales have suffered Canada continues to export canola oil and meal to China, Everson said.
Why it matters: Even though Canada’s canola industry, with assistance from the federal government, is working to find new markets and boost sales to existing ones, China remains the world’s largest importer and processor of oilseed.
Canada-China relations have also been strained since China arrested the two Canadians — Michael Spavor and Michael Kovrig — soon after Meng’s arrest.
Kovrig, is a former Canadian diplomat and Spavor is an entrepreneur specializing in business in North Korea.
“This is not a quick-fix kind of circumstance,” Everson said. “Obviously it has been an issue for over a year…
“It’s a complicated file and goes well beyond the issue of canola and it’s more about the relationship generally between China and Canada for the most part.
“The federal government has made strong efforts to support our industry on this. It is something that requires receptivity on China’s part… ”
China informed Canada in March that as of April 1, Canadian companies still allowed to export to China would have to supply canola with less than one per cent dockage.
“Those shipments, for the most part, have been at low dockage levels, so that level of trade should be able to continue under these circumstances with China,” Everson said.
Everson said he expects relations to improve because of Dominic Barton’s appointment as Canada’s ambassador to China in September 2019.
“But it’s something that really requires strong bilateral work at the highest political level and we continue to work with our government towards that,” Everson added.
While Canada exports canola to more than 50 countries now, efforts continue to further diversify markets, he said.
“On a year-to-date basis canola exports are up to Bangladesh, the United Arab Emirates, Europe, Pakistan and other markets,” he said. “And our exports to valued traditional exports — Japan, Mexico and the United States remain strong as well.
“We are still also working with, and urging the federal government, to establish a stronger presence, and more regular contact with regulators and policy-makers, particularly in key Asian markets. Diversification of our markets means creating the infrastructure to communicate on a technical and a policy level on a regular basis with those countries, understand what their positions are and the directions they are moving. So we are pushing our government to provide additional resources to be able to do that.”
When asked if the canola council had considered working with other Canadian grain companies to bypass Richardson and Viterra and export more canola seed to China, Everson said: “All the companies are working very closely through the value chain… to provide a united approach to working to restore the market with China and to work with our government.”