The extension comes just days before the new rules, which are part of a drive by China to boost oversight of its sprawling food supply chain, were due to come into force.

Jerome Lepeintre, minister counsellor for health and food safety at the European Union delegation in Beijing, said he received official documents on Monday night confirming the decision to delay had been logged with the World Trade Organization (WTO), as required by global trade rules.

Lepeintre said the move was “very positive” and would give exporters time to comply with the regulations, which were announced in April 2016 and require all food imports to carry health certificates, even if the product is deemed low-risk.

European and U.S. government and trade officials have warned the rules would hamper billions of dollars of shipments to the world’s No. 2 economy of everything from pasta to coffee and biscuits.

China asked for the change to be circulated by the WTO in a Sept. 22 communication to the organization, a document published on WTO’s website showed.

“The General Administration of Quality Supervision, Inspection and Quarantine of China is currently studying the comments from relevant countries/regions,” said the notification.

“According to the comments and application received, we hereby decide to provide a transitional period of two years: from 1 October 2017 to 30 September 2019,” added the agency, which oversees the safety of all imports into China.

AQSIQ did not respond to a fax requesting comment from Reuters.

China has delayed enforcing other tough new trade regulations this year, including rules on the cross-border retail market and cyber security, after industry pushback.

— Dominique Patton reports on China’s agriculture sector for Reuters from Beijing; additional reporting by Tony Munroe.

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The Canadian Food Inspection Agency on Thursday released details of a new certification program in which the agency can approve Canadian wild rice processing, warehousing and exporting facilities for the Chinese market.

Under the system, recognition of a facility’s CFIA approval must be obtained from China’s Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) before exports can begin from said facility.

CFIA said Thursday it has been working on such a system since 2013-14, at Canadian producers’ request. The agency signed a protocol with AQSIQ in September last year on inspection and quarantine requirements.

Grown mainly in Saskatchewan, Manitoba and northwestern Ontario, Canadian wild rice is produced in shallow waters such as small lakes and slow-flowing streams. The CFIA said Canadian industry estimates project exports worldwide to be worth about $5 million.

Under the new program, CFIA will run evaluations of exporting companies’ systems and conduct annual audits for compliance. The agency also has the right to visit exporters’ facilities “at any time” to sample wild rice for visual inspection, review records and verify compliance.

Processors and exporters storing Canadian wild rice for export are also required to maintain and monitor traps for insect pests. Monitoring data from those traps also has to be kept for auditing and reporting.

Measures also must be in place to prevent wild rice from mildewing, or being mixed with soil particles, plant residues or weed seeds, or being commingled or contaminated with other grains or “impurities,” the agency said.

Processors also must be able to show their wild rice has undergone heat treatment at a temperature between 150 C and 350 C for about two hours and brought to a moisture content between five and eight per cent.

Processed wild rice also must be stored “under hygienic conditions and in new, spill-proof packaging” and internal tracking systems must be in place allowing the wild rice’s origin to be traced back to its grower/supplier, confirming it was produced in Canada. — AGCanada.com Network

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China’s quarantine authority AQSIQ told Ottawa in February that it would impose a stricter inspection standard for canola shipments starting April 1. It later postponed the move to Sept. 1. Canada is the biggest exporter of canola, used mainly to produce vegetable oil.

AQSIQ and other Chinese officials are meeting through Friday with the Canadian Food Inspection Agency (CFIA), as well as Canada’s agriculture and trade departments, said Patti Miller, president of industry group Canola Council of Canada, which is also at the discussions.

“It’s a pretty difficult time right now,” Miller said in an interview from Beijing. “Both sides have been very open in expressing their desire to find a resolution, but there is a significant difference in opinion.”

Canadian canola shipments for delivery in China after Sept. 1 have stopped, she said.

China for years has raised concerns about blackleg disease spreading from Canadian canola into Chinese crops of rapeseed, another name for the oilseed. Traders have suggested that China’s real reason for a higher standard is that its domestic rapeseed oil stocks are high.

The two countries’ inspection agencies are working to find a “reasonable solution,” said Yang Yundong, spokesman for the Chinese Embassy in Canada.

China’s new standard would allow no more than one per cent foreign material, such as straw, per shipment, compared with the current maximum of 2.5 per cent. The tougher standard would raise cleaning costs and risk, exporters have said.

Canada’s farming and crop handling practices, along with China’s crushing process, mitigate any plant health risks, said CFIA spokeswoman Maria Kubacki.

At stake for Canada is the potential loss of its biggest canola market for exporters including Viterra and Cargill, just as farmers harvest a big crop.

For China, the dispute may hurt its push for a free trade deal with Canada.

“There’s an expectation from all that we meet in the middle here,” said Guy Gallant, spokesman for Canada’s Agriculture Minister Lawrence MacAulay, from Ottawa.

Trade Minister Chrystia Freeland met Chinese Commerce Minister Gao Hucheng last week about the issue, and is focused on finding a solution, said Freeland’s spokesman, Alex Lawrence.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.

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China’s new standard for foreign material in canola shipments will take effect Sept. 1 instead of April 1, Counsellor Yang Yundong, the spokesperson of the Chinese Embassy in Ottawa, said in an email to Reuters late Monday.

The new standard will allow no more than one per cent foreign material, such as straw and other plant seeds, per shipment, compared with the current maximum of 2.5 per cent.

Canada disagrees with the position that the new standard is needed. The Chinese Embassy spokesperson said his government hoped Canada would take “effective measures so that the issue could be resolved at an early date.”

The spokesperson said the change would reduce the risk of blackleg disease, caused by a fungus common in Canada, from spreading in China.

“The measures taken by the relevant Chinese authorities for that purpose are very much science-based and reasonable,” the spokesperson said.

The Canola Council of Canada says there is no significant risk of spreading the disease through foreign material in shipments. Canadian Agriculture Minister Lawrence MacAulay urged China this month to base its decision on scientific factors.

The Canola Council, whose directors include farmers as well as exporters Cargill and Richardson International, said there is no significant risk of spreading the disease through foreign material.

The next five months will be spent on research to confirm its position, council president Patti Miller said.

“For (exporters) who had made sales out into the future, they’ll be able to trade based on current terms, and that’s very welcome,” she said. “We’re solid on what we believe the scientific results are.”

MacAulay, in a statement Tuesday, said export conditions to China “remain unchanged” and Canadian and Chinese officials “continue to work on a permanent, science-based solution.”

Canada is the world’s biggest canola producer, and China is its biggest canola export market.

Some traders in both countries have said they believe China’s main motivation for the new standard is a desire to slow imports due to its large domestic rapeseed oil stocks.

China’s quarantine authority, AQSIQ, told the Canadian government in February that it was planning the new measure, causing a short-term drop in ICE Canada canola futures.

Despite the delay, Canadian exporters are reluctant to book new sales to China, said one Canadian canola futures broker.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg. Includes files from AGCanada.com Network staff.

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China’s quarantine authority, AQSIQ, notified the Canadian Food Inspection Agency (CFIA) last month that it would allow no more than one per cent of foreign material, such as straw and seeds from other plants, in canola shipments starting April 1. The current limit is 2.5 per cent.

Exporters have said the new standard by Canada’s biggest canola export market, arising from a dispute about a harmful fungus, would be difficult and costly to meet.

“There are active negotiations underway,” said Patti Miller, president of the Canola Council of Canada, an industry group whose directors include farmers as well as exporters and processors Cargill, Richardson International, Viterra, Bunge and Archer Daniels Midland.

“Both government and industry would like to have a permanent resolution. The focus of the negotiation is how we get there.”

Miller, speaking by email, said she could not comment on specifics. Ottawa is leading negotiations for Canada, with the council’s input, she said.

The Western Producer reported Thursday that China may delay implementation, citing Canadian industry sources.

CFIA spokeswoman Maria Kubacki confirmed the Canadian and Chinese governments are in talks, but said it was premature to comment on possible outcomes.

Blackleg disease, caused by a fungus common in Canada, can significantly reduce crop yields, and China has raised concerns since 2009 about the risk of it spreading to the country through imports. Some traders in both countries said the real issue behind the new standard was that China had ample stocks of rapeseed oil and wanted to slow imports.

A spokesman at the Chinese embassy in Ottawa could not comment.

ICE Canada canola futures lost eight per cent after China notified Canada of the pending change on Feb. 23. They bottomed out on March 2 and since have recovered the losses. They climbed 0.8 per cent on Monday.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.

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China’s quarantine authority, AQSIQ, notified the Canadian Food Inspection Agency last month that it would allow no more than one per cent foreign material, called dockage, in canola shipments starting April 1. The current allowable range is two per cent to 2.5 per cent.

Exporters say the new standard by Canada’s biggest canola export market will be difficult and costly to meet.

“I understand fully. It’s worth $2 billion in canola trade to China,” MacAulay told Reuters. “All our trading partners, we want to make sure the decisions they make are science-based decisions.

“Hopefully, it will be resolved.”

Industry group the Canola Council of Canada has said the dispute is over differing views about the risk of transmitting to Chinese fields the common fungus blackleg, through dockage.

Some traders in both countries say the real issue is that China has ample stocks of rapeseed oil and wants to slow imports.

The countries have collaborated for years on research of blackleg, after China raised concerns in 2009.

No Canadian minister has yet discussed the issue with a Chinese counterpart, MacAulay said, adding that communication is between CFIA and AQSIQ officials.

“I would think it would be up to Minister MacAulay to get on the phone or work with the ambassador, or something,” said Conservative MP Gerry Ritz, the previous agriculture minister. “I just find that ridiculous.”

Ritz said China had in the past limited imports through such measures when it had large supplies.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors, based in Winnipeg.

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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.

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.

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But some traders say the real reason for a higher standard that may slow Chinese imports is the country’s large rapeseed oil stockpiles.

Reuters reported on Tuesday that China’s quarantine authority, AQSIQ, told the Canadian Food Inspection Agency (CFIA) it would allow dockage of no more than one per cent foreign material in Canadian canola shipments as of April 1.

The current allowable dockage range is two to 2.5 per cent. Foreign material can include seeds of other plants or straw.

“We’re at a stage of scientific disagreement — that really is the issue at its heart,” said Patti Miller, president of the Canola Council of Canada, whose board includes exporters Cargill, Archer Daniels Midland and Richardson International. “We’re not aligned on the results of the last scientific study that we did.”

The countries have collaborated for years on research around blackleg, after China raised concerns in 2009. They have disagreed in the past year about potential blackleg transmission risk to Chinese farms through foreign material in canola shipments, Miller said in an interview.

The Canadian industry sees no significant risk, Miller said, adding that she could not release research results that are in dispute.

AQSIQ declined to comment. The agency’s letter to CFIA this week shows that it wants a resolution, but the parties are not done talking, Miller said.

The tougher standard will be difficult to meet, and make seed cleaning more expensive, possibly discouraging future sales, exporters say.

China is the world’s largest consumer of edible oils.

The stricter dockage standard allows China to work through high rapeseed oil stocks for the next year or two, an executive with a major Chinese buyer said.

Industry analysts estimate China’s rapeseed oil stocks at 5.5 million tonnes.

China subsidizes its farmers’ production, resulting in imports sometimes being cheaper than domestic supplies.

Importers are unsure what to do with cargoes scheduled to arrive after April 1, the Chinese buyer said.

Miller said she didn’t know how China’s new standard would affect sales that are already booked.

— Rod Nickel and Niu Shuping are Reuters correspondents in Winnipeg and Beijing respectively.

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China, Canada’s top canola export market, notified Ottawa on Tuesday of the new measures, Canadian Food Inspection Agency (CFIA) spokeswoman Tammy Jarbeau said in an email statement.

Reuters reported exclusively on Tuesday that China’s quarantine authority, AQSIQ, told CFIA it would allow no more than one per cent foreign material — called dockage — in Canadian canola shipments as of April 1.

The current allowable dockage range is two per cent to 2.5 per cent. Foreign material can include seeds of other plants or straw.

Exporters say the new standard will be difficult to achieve.

China’s canola imports from Canada tend to slow toward the end of the crop marketing year anyway, said Errol Anderson, a crop analyst at ProMarket in Calgary.

Even so, canola futures look to trade weaker in the near term, he said.

ICE Futures Canada canola futures partly recovered on Wednesday after tumbling to a nearly 10-month low in the previous session.

The Canadian government will work with China and canola exporters on standards that are “commercially viable,” CFIA’s Jarbeau said.

Canada is the world’s biggest canola exporter. Shippers include Cargill, Archer Daniels Midland, Viterra, Glencore and Richardson International.

— Reporting for Reuters by Rod Nickel in Winnipeg.

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