URGENT UPDATE: A significant blow to Australian farmers has emerged as a Chinese importer purchased a cargo of Canadian canola, just days after Canadian Prime Minister Mark Carney visited Beijing. This deal, which involves approximately 60,000 metric tons of Canadian canola, undercuts Australia’s prospects in the lucrative Chinese market.
The transaction is reported to be the first since China halted imports of Canadian canola in October 2022, and it is expected to be shipped after March 1, 2023. Sources familiar with the matter indicated that Carney’s recent diplomatic efforts are likely to lead to reduced tariffs on Canadian canola seed from a staggering 84 percent to about 15 percent, enhancing competitiveness for Canadian farmers.
As part of the emerging trade agreement, China’s commerce ministry announced adjustments to its anti-dumping measures on Canadian rapeseed, signaling a potential shift in market dynamics. One oilseed trader noted, “Lower duty on Canadian canola is almost a done deal after the Canadian PM visit. It makes sense to buy now.” This sentiment has sparked concerns among Australian exporters who had anticipated a surge in canola sales to China.
Australia’s hopes for increased oilseed exports have been dashed by this latest development, especially as state-owned company COFCO had recently purchased around 500,000 tons of Australian canola in the past few months. The Chinese market, which had resumed purchases of Australian canola after a long hiatus due to anti-dumping duties, now appears to be favoring Canadian suppliers.
Market reactions have been swift. Zhengzhou rapeseed meal futures plummeted by 2.4 percent to a one-year low on Monday, driven by expectations of greater supply from Canada. The halt in Canadian shipments has severely impacted China’s canola crushing industry, bringing it to a standstill for the first time since at least 2015, according to consultancy MySteel.
Trade data indicates that China’s canola imports fell to zero in October for the first time in two decades, with inventories at crushing plants now depleted. A final ruling in China’s anti-dumping investigation into Canadian canola is expected before March 9, 2023, which could have lasting implications for global canola trade.
As the situation develops, Australian farmers are left anxiously watching the shifting landscape of international trade. The implications of this purchase extend beyond immediate sales, affecting livelihoods and agricultural economics in Australia.
For now, stakeholders in both Canada and Australia are preparing for the next steps as the global canola market continues to evolve amid these urgent developments.
