Political posturing can affect grain prices

China is still buying Canadian canola through the various back doors it’s found to exploit

When you cut through the politics and posturing, China still needs some of what Canada is selling.

“They are repopulating their hog herd so they need feed,” Darren Bond, a farm enterprise management specialist with Manitoba Agriculture and Resource Development, told the CropTalk Webinar Sept. 16.

“They have developed a taste for canola oil. At some point in time there is an equilibrium that has to happen.

“China is not stupid. It can posture and drive the price down to make some purchases. China is still a big player in this.”

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Bond said he has read reports that China is buying Canadian canola, but not directly from Canada.

Indeed, there have been many published reports that China is buying Canadian canola seed from third countries, and that it’s also importing canola oil made from Canadian seed crushed in Europe and the United Arab Emirates (UAE).

“They are still buying,” Bond said. “Maybe it’s not in the same conventional methods we’ve seen in the past, but animals still need to eat and people still need to eat.

“When we’re marketing we’ve got to be able to survive the spats between countries when they might put pressure on prices. At the same time when we do see these rallies we need to be able to profit from them.”

In March 2019 China initially all but banned imports of Canadian canola seed claiming it was contaminated. Most observers believe it was in retaliation for the RCMP detaining a Huawei technologies executive in late 2018 on a U.S. warrant.

China’s ban on canola shipped by Canada’s two largest canola exporters — Richardson and Viterra — remains, but since March 2019, China has been importing Canadian canola seed and oil directly from Canada.

Canadian canola exports to China fell 45 per cent year over year during the 11-month period through June, however, total canola exports have jumped nine per cent, helped by a tripling of sales to France and double the shipments to the UAE, Reuters reported Aug. 10.

About the author

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Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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