This was the case five years ago, after Canada detained Meng Wanzhou, an executive from Chinese tech giant Huawei, notes the CRM Agri team.
Shortly after, China responded by banning imports of canola, which is also called rapeseed for certain variants, from two major Canadian suppliers, citing contamination concerns involving weed seeds and disease, recall the analysts.
It happened again this week when China, the second-largest rapeseed importer, launched an anti-dumping investigation into Canadian canola exports. This came after Canada imposed 100% tariffs on Chinese electric vehicles last month, they remarked.
The initial reaction was sharp in Winnipeg canola futures, with the November-2024 contract hitting its daily loss limit, down 7% at one point, reports CRM Agri.
But European buyers, the largest rapeseed importers, were quick to act. The 4.5% drop in Paris November-2024 rapeseed futures was short-lived, say the analysts.
China is key market for Canadian canola
More than half of canola exported by Canada makes its way to China.
“China is an important and valued market for Canadian canola,” says Chris Davison, Canola Council of Canada (CCC) president and CEO. “We are confident that an investigation into Canada’s canola trade with China will demonstrate alignment with and reinforce our support for rules-based trade.”
The CCC says it is awaiting further details on the investigation and that it will work closely with the federal government on this situation.
“Working to maintain open and predictable trade for canola is a top priority of the CCC,” continues Davison. “We will continue to engage on this issue to support market access and competitiveness for Canadian canola in this key market.”
China could source the oilseed from Australia and Ukraine for alternative supplies. Nevertheless, China's agriculture trade with Ukraine is limited.
