Beijing/Singapore | Reuters — A Chinese importer bought a cargo of Canadian canola shortly after Canadian Prime Minister Mark Carney’s visit to Beijing last week, trader sources said, boosting prospects for Canadian farmers and potentially undercutting sales by rival supplier Australia.
The Panamax cargo of about 60,000 metric tons 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 told Reuters on Monday.
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WHY IT MATTERS: Steep tariffs on Canadian canola effectively halted exports to China.
On Friday, Carney said Canada expects China to cut tariffs on Canadian canola seed to a combined rate of about 15 per cent by March 1 from 84 per cent currently, part of an initial trade deal that also reduces tariffs on Chinese electric vehicles.
China’s commerce ministry said later that day 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 tons 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 rapeseed meal futures CRSMcv1 fell 2.4 per cent to a more than one-year low on Monday on hopes of higher supplies.
China’s Canadian canola import collapse
China has been conducting an anti-dumping probe into Canadian canola and in August imposed preliminary duties of 75.8 per cent, effectively halting shipments amid a wider diplomatic and trade dispute between the two countries.
The halt in Canadian shipments has brought China’s vast canola crushing industry to a standstill for the first time since at least 2015, according to data from consultancy MySteel.
Monthly Chinese canola imports fell to zero in October for the first time in two decades, trade data shows, 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 March 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.
