March 2, 2012

 

China to partially lift ban on Canada's rapeseed

 

 

The quarantine authorities of China will permit Canadian rapeseed imports by some selected crushers situated in major growing regions, formerly banned due to fungal disease concerns, traders said Thursday (Mar 1).

 

The import relaxation, likely to be cleared in the second half of the year, would further boost rapeseed imports from the world's largest exporter to China later in the year.

 

ICE Canada rapeseed futures rose 11.6% in February, the biggest monthly gain since June 2010, on tight supplies.

 

China's quarantine bureau will allow nine crushers in the country's major rapeseed-growing provinces of Inner Mongolia, Jiangsu, Shandong and Zhejiang to import Canadian rapeseed, several traders said.

 

Another nine crushers outside major growing areas in the provinces of Fujian, Guangxi, Liaoning have received authorisation to continue to import, they said.

 

China has restricted imports of Canadian rapeseed since 2009 and only allowed shipments to areas away from the country's major growing areas on worries over the spread of the fungal disease blackleg.

 

Canada's government said rapeseed exports to China totalled RMB1.8 billion (US$1.9 billion) in 2010.

 

"The restriction will be relaxed but we don't expect access until the second half of the year when domestic harvest is ready," said a trading manager with an international trading house.

 

Chinese quarantine officials declined to comment.

 

Crushers cannot divert cargoes away from arrival ports, which means crushers in inland regions of Inner Mongolia are still unable to import, he said.

 

"China has to increase imports given the difficulty of raising domestic production," said another trader with a state-owned trading house.

 

Since putting the restriction in place, China has imported more Canadian rapeseed oil, which is a higher-value product than rapeseed. From August 2010 to April 2011, China bought 622,000 tonnes of rapeseed oil from Canada, accounting for more than a third of Canada's total rapeseed oil exports.

 

China, the world's top soy importer, increases imports of the oilseeds, which are crushed into meal and edible oils, to meet rising demand.

 

Capacity expansion by crushers in non-growing areas has helped boost purchases since late last year. Rapeseed imports this calendar year could reach 2.5-3 million tonnes, traders estimated, up from 1.26 million tonnes in 2011.

 

Rapeseed output from domestic harvests in May and June is likely to continue to fall to about 13 million tonnes.