context: Canada supplied 74 percent of the PRC’s imported canola meal in 2024, covering 45 percent of domestic supply. The ongoing anti-dumping probe into Canadian canola seeds, launched in September 2024, has already curbed imports. If further restrictions follow, feed costs could rise as lower canola imports already push a soymeal rally. The 100 percent tariff on Canadian canola oil and meal, effective 20 March 2025, aligns with Beijing’s push to diversify agricultural imports.
The tariff decision follows Canada’s 2024 tariffs on PRC EVs (100 percent) and steel/aluminium (25 percent), prompting Beijing’s anti-discrimination probe. Market expectations had centred on canola seed and meal as likely targets, but canola seed imports remain unaffected, writes Futures Daily.
The announcement had a muted impact on canola oil futures, which rose 4.61 percent before pulling back. However, canola meal surged due to supply concerns.
Canada’s role in the PRC’s vegetable oil market has declined since 2018 when its share of canola oil imports stood at 70–80 percent. That share had fallen to just 0.03 percent by 2024, while Canada still accounted for 96 percent of the PRC’s canola seed imports (6.13 million tonnes) and 74 percent of canola meal imports (2.02 million tonnes).
The latest tariffs reinforce the PRC’s long-term shift away from Canadian suppliers. The market anticipates greater diversification in oilseed imports.
However, global canola supply constraints add complexity.
The USDA forecasts 2024/25 global canola production at 85.31 million tonnes, down 4.6 percent y-o-y, with Canada’s production falling 7 percent to 17.8 million tonnes due to lower yields and reduced acreage.
EU and Australian canola output is also declining, and supply is tightening. Meanwhile, PRC canola imports dropped in early 2025, with March arrivals projected at just 260,000 tonnes. Low crushing volumes and declining stocks are further reshaping the market.
Vegetable oil markets remain volatile.
Palm oil faces weak export demand, with Indonesia delaying its B40 biodiesel mandate, while soybean oil tracks US–PRC trade tensions. South American output is strong, but US acreage cuts are providing some price support.
While the tariff’s impact on canola oil supply is limited, analysts see continued upside for canola meal, as tightening imports sustain higher feed costs. Traders are closely watching stock levels and trade flows, with spread opportunities emerging between canola, soybean and palm oil.