context: In March 2019, the state blocked canola shipments from two leading Canadian exporters, alleging biosecurity concerns. The move was viewed as retaliation for Canada’s arrest of Meng Wanzhou 孟晚舟, Chinese tech giant Huawei’s chief financial officer. With mounting pressure from higher edible oil prices and global supply uncertainties caused by the war in Ukraine, that political gripe has been shelved by Beijing.
China has lifted its 3-year ban on canola exports from two giant Canadian companies, Richardson International and Viterra Inc, according to the joint statement issued by Canadian Trade Minister Mary Ng and Ag Minister Marie-Claude Bibeau. There has yet to be any official announcement from the Chinese side.
Canadian canola industry welcomed this decision. The country’s canola trade with China has been seriously hit by Beijing’s targeted import ban. The total value of Canadian canola exports to China plummeted from C¥15 bn in 2018 to C¥4 bn in 2019. Subsequently, the amount gradually rebounded, to C¥7 bn in 2020 and C¥9 bn in 2021, as Canada regained its position as China’s key canola supplier, accounting for over 90 percent of its total imports.
Facing domestic canola seed and canola oil price spikes due to supply shortage, as well as shrinking imports from Russia, the second-largest canola supplier, China’s latest move shows its willingness to further restore canola trading relations with Canada. However, the decision may not bring an instant change in the canola trade, as Canada’s 2021/22 canola supply has tightened after the drought in 2021, predicts Guotaijunan Securities.