Some sort of fraud or more payback from China?
That’s the question facing Canadian pork and beef producers after Beijing banned their products last month.
As was the case with canola seed, the official Chinese explanation is that it halted imports because of contamination issues — “pests” in canola and the growth promotant ractopamine in pork.
While China has refused to provide its evidence that canola shipments contained pests, there apparently was a shipment of contaminated pork “that claimed to be Canadian,” said Gary Stordy, director of government and corporate affairs with the Canadian Pork Council.
“What we do know is there is a fraudulent use of export certificates,” he said. “At the end of the day, what information we do have available is that there is a fraudulent use of export certificates. The RCMP investigation will hopefully spread some light into that.”
In the meantime, the purported fraud affects the entire Canadian pork sector and also the beef sector.
“That basically raised into question the validity of other Canadian certificates for all pork and beef products,” said Stordy. “That is the reason why CFIA has temporarily stopped signing export certificates for Canadian meat into China.”
However, there’s no evidence the pork shipments in question came from Canada, he added.
“The pork could have originated from anywhere around the world,” he said.
Who that shipper might be is unknown but given China’s anger over Canada’s detention of Huawei executive Meng Wanzhou in December on a U.S. arrest warrant, there are strong suspicions the new ban (as well as the one affecting canola seed) is politically driven.
“The political situation is a dark cloud hanging over the discussions and trying to figure out if this is connected,” said Stordy.
It’s almost unthinkable that any Canadian packer would risk the trade relationship with China by sending pork from pigs raised with ractopamine, said Brent Bushell, general manager of the Western Hog Exchange. (The feed additive is legal here but not used in the vast majority of herds because it eliminates export markets such as China, which had accounted for about a fifth of pork exports.)
Bushell is not sure how the politics are connected to the bans, but he said they are part of the problem.
“I don’t believe that our commodities today are any different than what they were a year ago, or two or three years ago,” he said. “I don’t think anyone has proven that the pork with ractopamine has come from Canada.”
Why beef, too?
Nor has any connection been established with Canadian beef.
“It is unclear why beef products have been included in this suspension,” the Canadian Cattlemen’s Association said in a statement. “The Canadian government is seeking clarification from Chinese officials.”
Unlike pork, China is not a big customer of Canadian beef — although, until this setback, sales were growing rapidly.
China bought 2.6 per cent of Canadian beef exports last year, said the CCA. But that was a 19 per cent jump from a year earlier and in the first quarter of this year, sales had more than quadrupled.
The organization said it is working with the Canadian government and the Canadian Food Inspection Agency in an effort “to resume stable trade as quickly as possible.”
The Canadian Pork Council shares that hope.
“It’s hopefully going to be weeks, rather than months before we regain access,” Stordy said.
A third factor may make a resolution of the pork situation more likely than the canola one: African swine fever.
The disease has decimated China’s pig herds and it’s widely expected the nation will have to greatly increase meat imports. The government recently insisted it has turned the corner and domestic pork production is starting to increase again, but a new report casts doubt on that claim.
After speaking to several suppliers to large Chinese pig farms, Reuters reported earlier this month that Beijing is underestimating impact of the disease by a wide margin. The government says 11 per cent of breeding sows have been killed or slaughtered because of African swine fever, but the insiders told Reuters that figure is closer to 50 per cent. The news agency also found evidence the government is not accurately reporting the number of outbreaks and their extent.
In the meantime, the federal government is trying to reassure China about its oversight of meat exports.
“We proposed a plan with additional measures for the (meat) export system in a way to tighten it and raise awareness so they reopen the market as soon as possible,” said federal Agriculture Minister Marie-Claude Bibeau.
Stordy said that there will be no economic impact from the pork ban in the short term.
“If this drags on, it does bring into question the stability of the industry,” he said. “Right now, there’s handling the cost of dealing with a product that is destined from one country to another.”
On July 3, Alberta Agriculture and Forestry held a barbecue on the legislature grounds to show support for Alberta’s pork, canola and beef industries and to encourage the public to support Alberta producers.