China has once again put Canadian canola in its crosshairs.
China on Tuesday announced plans to start an anti-dumping investigation into canola imports from Canada, with canola futures earlier this morning trading down the $45/tonne limit in reaction to the news.
China’s move follows on the heels of the Canadian government last week slapping a 100% tariff on imports of Chinese electric vehicles, as well as tariffs of imported steel and aluminum from China. Retaliation from China was widely expected, and canola has been a target of Beijing before.
In early 2019, China banned canola imports originating from a pair of Canadian grain companies, Richardson and Viterra, alleging that shipments were contaminated. However, it was believed the real reason for the ban was pay back for Canada’s arrest of Huawei executive Meng Wanzhou at the behest of the American government.
The ban on shipments from Richardson and Viterra was eventually lifted in May 2022, and according to a statement from the China Ministry of Commerce, imports of Canadian canola increased significantly in the first full year afterward, jumping 170% year-on-year in 2023 – sparking the anti-dumping probe.
"Affected by the unfair competition of the Canadian side, China's domestic rapeseed-related industries continued to suffer losses," the Ministry of Commerce said in a statement.
Immediately following the ban on shipments from Richardson and Viterra, the value of Canadian canola exports to China fell to just $800 million in 2019, way down from $2.8 billion the previous year.
In a statement today, the Canola Council of Canada (CCC) said it is awaiting further details on the Chinese investigation but added it remains confident the outcome “will demonstrate alignment with and reinforce our support for rules-based trade.”
“Working to maintain open and predictable trade for canola is a top priority of the CCC,” said Chris Davison, CCC president and CEO. “We will continue to engage on this issue to support market access and competitiveness for Canadian canola in this key market.”
