Chinese tariff on canola seed comes into force as producers, premiers demand action
By The Canadian Press
By The Canadian Press
August 14, 2025
David Reid lands his 1957 Helio Courier on a landing strip bordered by his canola crop on the family's farm near Cremona, Alta., Thursday, July 17, 2025.
THE CANADIAN PRESS/Jeff McIntosh
REGINA — Prime Minister Mark Carney says he’s considering measures to support farmers hit by a steep Chinese tariff on canola seed that came into force Thursday.
Carney said on social media that he spoke with Saskatchewan Premier Scott Moe, and they agreed to continue talking with agriculture groups about possible options. He provided no details on a plan.
The duty of nearly 76 per cent, announced Tuesday, has already caused the price of one of Canada’s most valuable crops to fall, wiping out millions of dollars in its value.
“If maintained, these unjustified duties will have significant impacts on many Canadian farmers,” Carney said.
“Premier Moe and I focused on a series of measures to support hard-working farmers who provide world-class food to Canadians and our trading partners throughout the world.”
The tariff comes one year after China launched an anti-dumping investigation into Canadian canola. It was in response to Canada’s 100 per cent tariff on Chinese electric vehicles.
The two countries have since slapped each other with various levies.
Last year, Ottawa imposed its tariff on Chinese-made electric vehicles and 25 per cent tariffs on Chinese steel and aluminum. Beijing retaliated with 100 per cent tariffs on Canadian canola meal and oil.
China’s latest move on canola seed means all canola products face levies.
Earlier Thursday, federal Conservative Leader Pierre Poilievre repeated his call for Carney to cancel a $1-billion federal loan given to BC Ferries, which is purchasing Chinese-made ships.
“That is crazy at a time when they’re targeting our farmers,” he said.
Poilievre also accused Carney of not caring about western Canadian producers and of showing weak leadership when it comes to signing new trade deals.
“(Carney) is all talk and no action. Things are not different; they are getting worse.”
Carney failed to meet a self-imposed deadline to get a new trade deal with U.S. President Donald Trump but has said officials from both countries are still working together.
The international trade ministry said in a statement the government “will always protect our Canadian farmers and producers, their families and the jobs they support.”
The ministry also said Canada recently concluded a trade agreement with Ecuador and is close to finishing negotiations with the United Arab Emirates.
Agriculture Minister Heath MacDonald and International Trade Minister Maninder Sidhu have said they remain ready to speak constructively with Chinese officials to address trade concerns.
Carney also said Thursday that Canada will advance conversations with China, while aiming to expand exports to other countries.
“Canada does not dump canola. Canadian canola products meet the highest standards, and our inspection systems are robust,” he said.
Farmers have also rejected claims of dumping, arguing exporters have followed rules-based trade. They’ve called on Ottawa to resolve the issue by speaking constructively with Chinese officials.
In a letter to Carney, Saskatchewan Opposition NDP Leader Carla Beck urges the prime minister to organize a trade mission to China with premiers.
“New tariffs on canola seed are a serious threat to Saskatchewan and require urgent action and attention by your government,” Beck writes.
Beck also asks Carney to consider removing the tariffs on Chinese electric vehicles as a conciliatory measure to end the canola tariffs.
On Wednesday, Manitoba Premier Wab Kinew said Ottawa should use the revenues from its tariffs on Chinese EVs to support canola producers.
He also suggested Canada has collected $100 million in such tariffs, while China’s move has wiped out $1 billion in canola values.
Moe and the Canadian Canola Growers Association have both said the industry contributes more than $43 billion to the country’s economy and employs roughly 200,000 people.
The association says China is the largest export market for Canadian canola seed, taking up about 67 per cent of Canada’s shipments, worth billions of dollars.
This report by The Canadian Press was first published Aug. 14, 2025.
REGINA — Prime Minister Mark Carney says he’s considering measures to support farmers hit by a steep Chinese tariff on canola seed that came into force Thursday.
Carney said on social media that he spoke with Saskatchewan Premier Scott Moe, and they agreed to continue talking with agriculture groups about possible options. He provided no details on a plan.
The duty of nearly 76 per cent, announced Tuesday, has already caused the price of one of Canada’s most valuable crops to fall, wiping out millions of dollars in its value.
“If maintained, these unjustified duties will have significant impacts on many Canadian farmers,” Carney said.
“Premier Moe and I focused on a series of measures to support hard-working farmers who provide world-class food to Canadians and our trading partners throughout the world.”
The tariff comes one year after China launched an anti-dumping investigation into Canadian canola. It was in response to Canada’s 100 per cent tariff on Chinese electric vehicles.
The two countries have since slapped each other with various levies.
Last year, Ottawa imposed its tariff on Chinese-made electric vehicles and 25 per cent tariffs on Chinese steel and aluminum. Beijing retaliated with 100 per cent tariffs on Canadian canola meal and oil.
China’s latest move on canola seed means all canola products face levies.
Earlier Thursday, federal Conservative Leader Pierre Poilievre repeated his call for Carney to cancel a $1-billion federal loan given to BC Ferries, which is purchasing Chinese-made ships.
“That is crazy at a time when they’re targeting our farmers,” he said.
Poilievre also accused Carney of not caring about western Canadian producers and of showing weak leadership when it comes to signing new trade deals.
“(Carney) is all talk and no action. Things are not different; they are getting worse.”
Carney failed to meet a self-imposed deadline to get a new trade deal with U.S. President Donald Trump but has said officials from both countries are still working together.
The international trade ministry said in a statement the government “will always protect our Canadian farmers and producers, their families and the jobs they support.”
The ministry also said Canada recently concluded a trade agreement with Ecuador and is close to finishing negotiations with the United Arab Emirates.
Agriculture Minister Heath MacDonald and International Trade Minister Maninder Sidhu have said they remain ready to speak constructively with Chinese officials to address trade concerns.
Carney also said Thursday that Canada will advance conversations with China, while aiming to expand exports to other countries.
“Canada does not dump canola. Canadian canola products meet the highest standards, and our inspection systems are robust,” he said.
Farmers have also rejected claims of dumping, arguing exporters have followed rules-based trade. They’ve called on Ottawa to resolve the issue by speaking constructively with Chinese officials.
In a letter to Carney, Saskatchewan Opposition NDP Leader Carla Beck urges the prime minister to organize a trade mission to China with premiers.
“New tariffs on canola seed are a serious threat to Saskatchewan and require urgent action and attention by your government,” Beck writes.
Beck also asks Carney to consider removing the tariffs on Chinese electric vehicles as a conciliatory measure to end the canola tariffs.
On Wednesday, Manitoba Premier Wab Kinew said Ottawa should use the revenues from its tariffs on Chinese EVs to support canola producers.
He also suggested Canada has collected $100 million in such tariffs, while China’s move has wiped out $1 billion in canola values.
Moe and the Canadian Canola Growers Association have both said the industry contributes more than $43 billion to the country’s economy and employs roughly 200,000 people.
The association says China is the largest export market for Canadian canola seed, taking up about 67 per cent of Canada’s shipments, worth billions of dollars.
This report by The Canadian Press was first published Aug. 14, 2025.
‘It’s devastating’: Manitoba farmers react to Chinese canola tariffs
By Alex Karpa
August 14, 2025
Alex Karpa reports on the impact new tariffs launched by China in response to Canada’s tariff on electric vehicles could have on farmers and consumers.
When David Hamblin heard China is slapping a nearly 76 per cent tariff on imports of Canadian canola, it was a “here we go again” moment for the Manitoba farmer.
“It’s something that we are unfortunately kind of getting used to,” he said. “With these political things that are kind of happening, I don’t think it’s as shocking as these things used to be. It’s unfortunate, but it’s the world we are living in.”
China, which sources nearly all of its supplies of canola from Canada, announced preliminary anti-dumping duties on canola imports on Tuesday, escalating a year-long trade dispute that began with Ottawa’s tariffs on Chinese electric vehicle (EV) imports last August.
The new tariffs, set at 75.8 per cent, will come into effect on Thursday.
“Canada is deeply disappointed with China’s decision to implement provisional anti-dumping duties in its self-initiated investigation into import of canola seed from Canada,” International Trade Minister Maninder Sidhu and Agriculture Minister Heath MacDonald said in a statement Tuesday.
“We do not dump canola. Our hard-working farmers provide world-class food to Canadians and international trading partners. Canadian canola products meet the highest standards, and our inspection systems are robust,” they said.
“Canada is committed to ensuring fair market access for our canola industry and we remain ready to engage in constructive dialogue with Chinese officials to address our respective trade concerns.”
Hamblin says this new escalation in the tariff war between Canada and China is creating uncertainty for canola farmers like himself.
“It’s hit our bottom line significantly, if we were to sell today,” he said. “We don’t know what that number will be down the road. We are hopefully things will prevail.”
MacDonald and Sidhu met with Canadian canola representatives Wednesday to discuss next possible steps.
Canola seed production generated nearly $13 billion in 2024, making it the most valuable field crop in the country.
Farmer Warren Ellis, who is also the chair of Manitoba Canola Growers, said this is a devastating blow to the canola industry.
“Things are still unfolding,” he said. “The challenge now is how do we survive this? How do we improve our cash flows without losing our bottom line? That’s a challenge.”
Ellis says it’s still too early to tell what impact this will ultimately have down the road, but if it continues, it won’t be good.
“Some farmers have a hard time growing other crops,” he said. “Canola makes up a huge part of a lot of farmers income and it’s very important for them.”
Canada is now in trade conflicts with the world’s two largest economies, the United States, and China.
University of Manitoba Agriculture professor Derek Brewin says canola prices are really starting to take a hit.
“On Monday, you could sell your canola for $660 per tonne, and on Tuesday afternoon, it went to $630 per tonne,” he said. “That’s a pretty big drop for a single day on any market move.”
China is the largest export market for Canadian canola seed. According to the Government of Canada, it represents 67 per cent of total canola seed exports, totalling 5.9 million tonnes in 2024, worth approximately $4 billion.
“If they don’t solve the trade dispute, or if they leave this duty in for a long period of time, next spring, farmers won’t seed very much canola,” Brewin said. “If we’re not exporting to China, we’re not exporting quite a bit of our production.”
Hamblin would like to see these trade disputes resolved quickly, as harvest season is right around the corner.
“A month or two down the road, or sooner, hopefully we can see trade progress on all crops and get some of these things ironed out.”
Back in March, China imposed a 100 per cent levy on Canadian canola oil and meal, plus peas, and a 25 per cent tax on Canadian seafood and pork.
By Alex Karpa
August 14, 2025
Alex Karpa reports on the impact new tariffs launched by China in response to Canada’s tariff on electric vehicles could have on farmers and consumers.
When David Hamblin heard China is slapping a nearly 76 per cent tariff on imports of Canadian canola, it was a “here we go again” moment for the Manitoba farmer.
“It’s something that we are unfortunately kind of getting used to,” he said. “With these political things that are kind of happening, I don’t think it’s as shocking as these things used to be. It’s unfortunate, but it’s the world we are living in.”
China, which sources nearly all of its supplies of canola from Canada, announced preliminary anti-dumping duties on canola imports on Tuesday, escalating a year-long trade dispute that began with Ottawa’s tariffs on Chinese electric vehicle (EV) imports last August.
The new tariffs, set at 75.8 per cent, will come into effect on Thursday.
“Canada is deeply disappointed with China’s decision to implement provisional anti-dumping duties in its self-initiated investigation into import of canola seed from Canada,” International Trade Minister Maninder Sidhu and Agriculture Minister Heath MacDonald said in a statement Tuesday.
“We do not dump canola. Our hard-working farmers provide world-class food to Canadians and international trading partners. Canadian canola products meet the highest standards, and our inspection systems are robust,” they said.
“Canada is committed to ensuring fair market access for our canola industry and we remain ready to engage in constructive dialogue with Chinese officials to address our respective trade concerns.”
Hamblin says this new escalation in the tariff war between Canada and China is creating uncertainty for canola farmers like himself.
“It’s hit our bottom line significantly, if we were to sell today,” he said. “We don’t know what that number will be down the road. We are hopefully things will prevail.”
MacDonald and Sidhu met with Canadian canola representatives Wednesday to discuss next possible steps.
Canola seed production generated nearly $13 billion in 2024, making it the most valuable field crop in the country.
Farmer Warren Ellis, who is also the chair of Manitoba Canola Growers, said this is a devastating blow to the canola industry.
“Things are still unfolding,” he said. “The challenge now is how do we survive this? How do we improve our cash flows without losing our bottom line? That’s a challenge.”
Ellis says it’s still too early to tell what impact this will ultimately have down the road, but if it continues, it won’t be good.
“Some farmers have a hard time growing other crops,” he said. “Canola makes up a huge part of a lot of farmers income and it’s very important for them.”
Canada is now in trade conflicts with the world’s two largest economies, the United States, and China.
University of Manitoba Agriculture professor Derek Brewin says canola prices are really starting to take a hit.
“On Monday, you could sell your canola for $660 per tonne, and on Tuesday afternoon, it went to $630 per tonne,” he said. “That’s a pretty big drop for a single day on any market move.”
China is the largest export market for Canadian canola seed. According to the Government of Canada, it represents 67 per cent of total canola seed exports, totalling 5.9 million tonnes in 2024, worth approximately $4 billion.
“If they don’t solve the trade dispute, or if they leave this duty in for a long period of time, next spring, farmers won’t seed very much canola,” Brewin said. “If we’re not exporting to China, we’re not exporting quite a bit of our production.”
Hamblin would like to see these trade disputes resolved quickly, as harvest season is right around the corner.
“A month or two down the road, or sooner, hopefully we can see trade progress on all crops and get some of these things ironed out.”
Back in March, China imposed a 100 per cent levy on Canadian canola oil and meal, plus peas, and a 25 per cent tax on Canadian seafood and pork.
How a shift to canola-based biofuel could help make up for lost Chinese market
By Allison Bamford
August 15, 2025
As China begins subjecting Canadian canola to new tariffs, industry leaders are calling for Canada to diversify trade of the crop. Allison Bamford reports.
Long before China imposed its anti-dumping duty on Canadian canola seed and 100 per cent tariffs on canola oil and meal, industry leaders had been looking to diversify away from the unpredictable market.
A big opportunity lies in the biofuel market both in Canada and the United States.
“Canadian canola is a terrific feedstock for producing renewable fuels,” said Chris Vervaet, executive director of the Canadian Oilseed Processors Association.
Canada’s clean fuel regulations are driving demand for low carbon renewable fuels, such as biodiesel and renewable diesel, Vervaet said.
Domestic production is growing, but canola isn’t the preferred feedstock.
Used cooking oil and other waste oils – products that are cheaper to source – make up the bulk of the biofuel feedstock.
“Currently, canola has a piece of that pie. It’s not the size of the pie that we want,” Vervaet said.
If canola were to capture half of the biofuel market, in terms of being the preferred feedstock, Vervaet said that would equate to roughly 2.5 million tons of canola, which is nearly half of the seed that is exported to China annually.
“We’d go a long way in addressing the concern that’s in front of us right now,” he said.
Vervaet said the industry would like to see the federal clean fuel regulations implement guardrails to prevent the use of “questionable” feedstock and imported used cooking oil in biofuel production.
“The imported used cooking oil that’s coming into our biofuel market is eating canola’s lunch. It’s taking market share away from us when we need it most,” he said.
Canola prices have dropped since news of the Chinese anti-dumping duty hit. Millions of dollars in canola value have already been wiped out.
Martin Reaney, the Chair in Lipid Quality and Utilization at the University of Saskatchewan, said dropping prices could increase the appetite for canola-based biofuel.
“There’s a greater capacity to handle more of that canola oil should it become available at a more approachable price,” Reaney said.
There’s also potential for canola to tap into the sustainable aviation fuel (SAF) industry, according to North Vector Dynamics Chief Operating Officer Omar Saleh.
Canola can be used to produce SAF, which is chemically identical to conventional jet fuel, Saleh said.
“It would function on existing airport infrastructure in terms of refueling infrastructure. It would function with the same engines that we have today,” he said.
SAF is already being used by the U.S. Air Force. Australia is manufacturing it, and Air Canada purchased this country’s first commercial batch last year.
“We’re already producing it. We’re just doing it on a really small scale, and so is the U.S. and so is the EU,” Saleh said.
Saleh said Canada would need to expand its canola crushing capacity and upgrade some of its facilities to manufacture canola-based SAF, but the infrastructure is already there.
Allison Bamford
Videojournalist, CTV National News
August 15, 2025
As China begins subjecting Canadian canola to new tariffs, industry leaders are calling for Canada to diversify trade of the crop. Allison Bamford reports.
Long before China imposed its anti-dumping duty on Canadian canola seed and 100 per cent tariffs on canola oil and meal, industry leaders had been looking to diversify away from the unpredictable market.
A big opportunity lies in the biofuel market both in Canada and the United States.
“Canadian canola is a terrific feedstock for producing renewable fuels,” said Chris Vervaet, executive director of the Canadian Oilseed Processors Association.
Canada’s clean fuel regulations are driving demand for low carbon renewable fuels, such as biodiesel and renewable diesel, Vervaet said.
Domestic production is growing, but canola isn’t the preferred feedstock.
Used cooking oil and other waste oils – products that are cheaper to source – make up the bulk of the biofuel feedstock.
“Currently, canola has a piece of that pie. It’s not the size of the pie that we want,” Vervaet said.
If canola were to capture half of the biofuel market, in terms of being the preferred feedstock, Vervaet said that would equate to roughly 2.5 million tons of canola, which is nearly half of the seed that is exported to China annually.
“We’d go a long way in addressing the concern that’s in front of us right now,” he said.
Vervaet said the industry would like to see the federal clean fuel regulations implement guardrails to prevent the use of “questionable” feedstock and imported used cooking oil in biofuel production.
“The imported used cooking oil that’s coming into our biofuel market is eating canola’s lunch. It’s taking market share away from us when we need it most,” he said.
Canola prices have dropped since news of the Chinese anti-dumping duty hit. Millions of dollars in canola value have already been wiped out.
Martin Reaney, the Chair in Lipid Quality and Utilization at the University of Saskatchewan, said dropping prices could increase the appetite for canola-based biofuel.
“There’s a greater capacity to handle more of that canola oil should it become available at a more approachable price,” Reaney said.
There’s also potential for canola to tap into the sustainable aviation fuel (SAF) industry, according to North Vector Dynamics Chief Operating Officer Omar Saleh.
Canola can be used to produce SAF, which is chemically identical to conventional jet fuel, Saleh said.
“It would function on existing airport infrastructure in terms of refueling infrastructure. It would function with the same engines that we have today,” he said.
SAF is already being used by the U.S. Air Force. Australia is manufacturing it, and Air Canada purchased this country’s first commercial batch last year.
“We’re already producing it. We’re just doing it on a really small scale, and so is the U.S. and so is the EU,” Saleh said.
Saleh said Canada would need to expand its canola crushing capacity and upgrade some of its facilities to manufacture canola-based SAF, but the infrastructure is already there.
Allison Bamford
Videojournalist, CTV National News
By Reuters
August 12, 2025
Pumpjacks draw out oil and gas from well heads surrounded by Canola fields near Cremona, Alta., Monday, July 15, 2024. THE CANADIAN PRESS/Jeff McIntosh
BEIJING/SINGAPORE — China on Tuesday announced preliminary anti-dumping duties on Canadian canola imports, a fresh escalation in the year-long trade dispute that began with Ottawa’s imposition of tariffs on Chinese electric vehicle imports last August.
The provisional rate will be set at 75.8 per cent, effective from Thursday, the Ministry of Commerce said in a statement.
ICE November canola futures RSX5 fell 6.5 per cent to a four-month low after the announcement.
“This really came as a surprise and a shock,” said trader Tony Tryhuk of RBC Dominion Securities.Trade War coverage on BNNBloomberg.ca
China, the world’s largest importer of canola - also known as rapeseed - sources nearly all of its supplies of the product from Canada. The steep duties would likely all but end imports if they are maintained.
“This is huge. Who will pay a 75 per cent deposit to bring Canadian canola to China? It is like telling Canada that we don’t need your canola, thank you very much,” said one Singapore-based oilseed trader.
China’s Ministry of Commerce said on Tuesday that an anti-dumping probe launched in September 2024had found that Canada’s agricultural sector - particularly the canola industry - had benefited from “substantial” government subsidies and preferential policies.
China has until September, when the investigation formally ends, to make a final decision on the duties, though it has the option of extending that deadline by six months. A final ruling could result in a different rate, or overturn Tuesday’s decision.
The decision marks a shift from the conciliatory tone struck in June when China Premier Li Qiang said there were no deep-seated conflicts of interest between the countries during a phone call with Canadian Prime Minister Mark Carney.
“This move ... will put additional pressure on Canada’s government to sort through trade frictions with China,” said Trivium China agriculture analyst Even Rogers Pay.
Canada’s trade, agriculture and the prime minister’s office did not immediately respond to request for comment. The Canadian embassy in Beijing did not respond to Reuters’ request for comment.
China had already imposed tariffs on canola oil and meal in March. Canada is now in a trade conflict with the world’s two largest economies, as it also faces tariffs on some goods from the United States.
Separately, China also launched an anti-dumping investigation into Canadian pea starch and imposed provisional duties on imports of halogenated butyl rubber, according to ministry statements.
No easy replacement
Replacing millions of tons of Canadian canola is likely to be difficult at short notice, say analysts.
China primarily uses imported canola to make animal feed for its aquaculture sector. A separate duty on Canadian canola meal imports in March has already put these supplies at risk.
The move provides an opportunity for Australia, which looks set to regain access to the Chinese market with a few test cargoes this year after a years-long freeze in the trade, Pay said.
Australia, the second-largest canola exporter, has been shut out of the Chinese market since 2020 due mainly to Chinese rules to stop the spread of fungal plant disease.
However, even if Australian imports increase, “fully replacing Canadian canola will be very difficult unless import demand drops sharply,” said Donatas Jankauskas, an analyst with commodity data firm CM Navigator.Latest updates on investing here
Commodity funds have a substantial long position in ICE canola futures, traders said, which should add fuel to the selloff fire.
“This will help accelerate their exit of that long and could really extend the losses,” said Tryhuk.
Another trader said there was already downward pressure coming into canola prices as Canada’s crop is widely believed to be bigger than many previously forecast due to good weather.
“We’re just realizing we’ve got a better crop that’s about to come off,” said the trader. “This is a gut punch no one was expecting.”
Ventum Financial broker David Derwin said some traders don’t know how to take the Chinese move yet, since it is not a final rule.
“Is it a negotiating tactic? Or does China put it in and that’s that?” Derwin asked.
---
Reporting by Ella Cao and Lewis Jackson in Beijing and Naveen Thukral in Singapore; Additional reporting by Gus Trompiz in Paris and Ed White in Winnipeg; Editing by Christian Schmollinger, Bernadette Baum, Jan Harvey and Mark Porter
BEIJING/SINGAPORE — China on Tuesday announced preliminary anti-dumping duties on Canadian canola imports, a fresh escalation in the year-long trade dispute that began with Ottawa’s imposition of tariffs on Chinese electric vehicle imports last August.
The provisional rate will be set at 75.8 per cent, effective from Thursday, the Ministry of Commerce said in a statement.
ICE November canola futures RSX5 fell 6.5 per cent to a four-month low after the announcement.
“This really came as a surprise and a shock,” said trader Tony Tryhuk of RBC Dominion Securities.Trade War coverage on BNNBloomberg.ca
China, the world’s largest importer of canola - also known as rapeseed - sources nearly all of its supplies of the product from Canada. The steep duties would likely all but end imports if they are maintained.
“This is huge. Who will pay a 75 per cent deposit to bring Canadian canola to China? It is like telling Canada that we don’t need your canola, thank you very much,” said one Singapore-based oilseed trader.
China’s Ministry of Commerce said on Tuesday that an anti-dumping probe launched in September 2024had found that Canada’s agricultural sector - particularly the canola industry - had benefited from “substantial” government subsidies and preferential policies.
China has until September, when the investigation formally ends, to make a final decision on the duties, though it has the option of extending that deadline by six months. A final ruling could result in a different rate, or overturn Tuesday’s decision.
The decision marks a shift from the conciliatory tone struck in June when China Premier Li Qiang said there were no deep-seated conflicts of interest between the countries during a phone call with Canadian Prime Minister Mark Carney.
“This move ... will put additional pressure on Canada’s government to sort through trade frictions with China,” said Trivium China agriculture analyst Even Rogers Pay.
Canada’s trade, agriculture and the prime minister’s office did not immediately respond to request for comment. The Canadian embassy in Beijing did not respond to Reuters’ request for comment.
China had already imposed tariffs on canola oil and meal in March. Canada is now in a trade conflict with the world’s two largest economies, as it also faces tariffs on some goods from the United States.
Separately, China also launched an anti-dumping investigation into Canadian pea starch and imposed provisional duties on imports of halogenated butyl rubber, according to ministry statements.
No easy replacement
Replacing millions of tons of Canadian canola is likely to be difficult at short notice, say analysts.
China primarily uses imported canola to make animal feed for its aquaculture sector. A separate duty on Canadian canola meal imports in March has already put these supplies at risk.
The move provides an opportunity for Australia, which looks set to regain access to the Chinese market with a few test cargoes this year after a years-long freeze in the trade, Pay said.
Australia, the second-largest canola exporter, has been shut out of the Chinese market since 2020 due mainly to Chinese rules to stop the spread of fungal plant disease.
However, even if Australian imports increase, “fully replacing Canadian canola will be very difficult unless import demand drops sharply,” said Donatas Jankauskas, an analyst with commodity data firm CM Navigator.Latest updates on investing here
Commodity funds have a substantial long position in ICE canola futures, traders said, which should add fuel to the selloff fire.
“This will help accelerate their exit of that long and could really extend the losses,” said Tryhuk.
Another trader said there was already downward pressure coming into canola prices as Canada’s crop is widely believed to be bigger than many previously forecast due to good weather.
“We’re just realizing we’ve got a better crop that’s about to come off,” said the trader. “This is a gut punch no one was expecting.”
Ventum Financial broker David Derwin said some traders don’t know how to take the Chinese move yet, since it is not a final rule.
“Is it a negotiating tactic? Or does China put it in and that’s that?” Derwin asked.
---
Reporting by Ella Cao and Lewis Jackson in Beijing and Naveen Thukral in Singapore; Additional reporting by Gus Trompiz in Paris and Ed White in Winnipeg; Editing by Christian Schmollinger, Bernadette Baum, Jan Harvey and Mark Porter
