China’s state-owned Sinograin will increase Canadian canola oil imports next year, the Canadian government said Dec. 5 after failing to secure broader access to the market for Canada’s exports of the oilseed.
Sinograin, which manages China’s grain reserves, plans to import 350,000 tonnes of Canadian canola oil in 2010, an increase of 200,000 tonnes, the Canadian government said in a statement.
But a visit by Canadian Prime Minister Stephen Harper and two cabinet ministers did not lead to any easing of Chinese restrictions against canola seed.
China was Canada’s top export market for canola seed last year and shifts in Chinese demand are watched closely by traders.
The Canola Council of Canada estimates the increased sales to Sinograin, one of several Chinese importers of Canadian canola oil, will be worth $180 million.
“It will certainly help as we’re expanding crush capacity to have additional customers,” Dave Hickling, vice-president of canola utilization for the canola council, said in an interview.
Cargill expanded its Clavet, Saskatchewan, crushing plant last summer, while two plants are under construction at Yorkton, Saskatchewan. One is owned by James Richardson International and the other by Louis Dreyfus and Japan’s Mitsui and Co. Crushing plants process the canola seed into oil and meal.
China was Canada’s second-biggest canola oil export market after the United States last year, importing 361,800 tonnes through the first 11 months of the 2008-09 crop year, according to the Canola Council of Canada website.
The announcement came after Canadian Agriculture Minister Gerry Ritz and International Trade Minister Stockwell Day travelled through China with Harper. China since Nov. 15 has restricted Canadian canola with blackleg disease to lesser-used ports away from China’s rapeseed-growing areas.
“While we welcome the news that Sinograin is committed to purchasing more canola oil, we remain deeply concerned about the continuing quarantine on our canola seed,” canola council president JoAnne Buth, who was also in China this week, said in a statement.
Blackleg is a disease caused by a fungus that can kill the canola plant. It is commonly found on Canadian canola and is also present in other major rapeseed-growing areas, including China. Chinese officials have said they believe Canada has more virulent strains of the disease, Buth said.