China’s near-total ban on Canadian canola seed dominated the news cycle in the past year.
“The biggest challenge we faced through 2019 was the blockage of canola seed shipments to China,” said Jim Everson, president of Canola Council of Canada.
“China is, of course, a very significant market for canola seed, oil, and meal, but on the seed front, our two large exporters — Richardson and Viterra — are unable to export seed because of regulatory actions the Chinese have taken. It’s been a very, very difficult year.”
The spat began with the Dec. 1, 2018 arrest of Huawei chief financial officer Meng Wanzhou on a U.S. extradition warrant. Soon after, exporters reported cargoes of Canadian canola were being unusually delayed by Chinese customs — a sign of trouble ahead.
By March, both Richardson and Viterra had their export licences revoked by Beijing, ostensibly because of contamination of “harmful organisms.” The Canadian Food Inspection Agency disputed that claim, saying that samples taken from the vessels shipped to China showed no problems.
But the crisis was just getting underway.
In the months since then, Canada’s canola industry has tapped the World Trade Organization to resolve the dispute, with a formal request for WTO consultations from Ottawa at the start of September, followed by a face-to-face meeting between the two countries in Geneva in late October. The next steps — and their timeline — are still unclear.
In the meantime, farmers have been left to worry about their cash flow, marketing plans, grain storage, and seeding plans for next year — and their worries aren’t over yet. There has been no movement of canola seed to China from Canada’s two largest exporters since their licences were first pulled, with no end in sight to the feud.
“Just recently, seed exports have picked up to some extent — obviously not from those two large exporters, but from others in Canada,” said Everson.
“But our Canadian shipments in the last couple of months have been about a quarter of what we would normally expect.
“It’s good to have some export of seed to China taking place, but it won’t really return to normal for the producer and the industry until there’s a resolution of issues and those two exporters are able to export again.”
And while canola acreage dipped in 2019 by about eight per cent across Canada as a result of the situation with China, Everson is hopeful that some of the recent movement will spark some hope within the industry.
“Producers appear to continue to put a lot of confidence in canola, and we suspect in 2020, we’ll have a very solid acreage base going forward again,” he said.
“We have trade challenges with China currently, but we’ve often had trade challenges in the past with China. Sometimes these things take time to work out, but we’re optimistic we’ll figure it out and that we’ll be able to re-engage in a more predictable way with that market.
“There’s a lot to be encouraged by in the future for canola.”