Winnipeg | Reuters — Crop handler Paterson Grain will take a more cautious approach to selling canola to Chinese buyers for the near term, after China said it would toughen its standard on canola shipments from Canada, the CEO of parent Paterson GlobalFoods said.
China’s quarantine authority, AQSIQ, told Ottawa last week it would allow no more than one per cent foreign material — called dockage — in Canadian canola shipments as of April 1.
Some say the move is linked to a disagreement between the countries over potential risk for transmitting the blackleg fungus, while others say China wants to slow imports due to its large rapeseed oil stocks.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
The higher standard is expected to be difficult and costly for Canadian exporters to meet.
“Companies that are placed in this hardship will think twice about supplying any of these individuals again if some of these obstacles are proven false,” PGF CEO Andrew Paterson said in an interview Wednesday.
Canadian farmers will ultimately pay for heightened risks shipping to China, Paterson said.
Grain handlers will pay them less to cover the risk of shipments potentially being rejected in China, although such discounting has not yet begun, he said.
“That’s why it’s important that the government of Canada and the regulatory bodies fight hard to make sure that these things are not accepted without a very good argument and fight.”
Paterson GlobalFoods is a private, family-owned company based in Winnipeg.
— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.
