January 31, 2025
China's anti-dumping investigation on Canadian rapeseed imports and its impact
On September 9, 2024, China's Ministry of Commerce announced the start of an anti-dumping investigation on imported rapeseed from Canada.
Canada is the world's second-largest rapeseed producer and the biggest exporter globally. According to statistics from China's National Bureau of Statistics, Canadian rapeseed production in 2023 was 20 million tonnes while exports were 7.45 million tonnes (accounting for 37.25%, of which 5.05 million tonnes or 67.8% were exported to China).
China's rapeseed production in 2023 was 16.3 million tonnes and the total import volume was 5.49 million tonnes, of which imports from Canada accounted for 91%. Historically, China's rapeseed supply mainly relies on imports to supplement the domestic gap.
According to recent reports, Canada's rapeseed exports to China have increased significantly, reaching US$3.47 billion in 2023, a year-on-year increase of 170%. As such, prices continued to fall, hence causing rapeseed-related sectors to run into deficits.
Impact on China's domestic rapeseed oil and rapeseed meal market
From January to August 2024, China imported a total of 3.4245 million tonnes of rapeseed. Although this decreased year-on-year, the current inventory of rapeseed oil is actually at a historical high. Therefore, the anti-dumping case will have little impact on the market in the short term.
Moreover, imports from Canada will not be affected until a preliminary ruling can confirm an instance of dumping. Considering other agricultural product disputes, it may take at least half a year for the case to take effect. Even if dumping is confirmed, the increase in import costs remains uncertain.
Still, with the anti-dumping investigation, it is expected that the customs clearance time and fees for imported Canadian rapeseed will increase. It will also take time for China to import from other countries, which can push up the prices of rapeseed oil and rapeseed meal, particularly the latter as domestic supply is significantly lower than that of rapeseed oil.
It should be noted that when the spokesperson of the Ministry of Commerce of China announced on September 3 that it would launch the investigation on Canadian rapeseed, domestic rapeseed meal futures rose sharply, surging 15% over the next four days. In contrast, rapeseed oil futures only grew by 6.15% within three days before correcting lower.
China's rapeseed and rapeseed meal market
China's rapeseed is mainly winter crop, sown from October to December and harvested and brought into the market in April and May of the following year. Its domestic rapeseed output is about 16 million tonnes. Unlike imported rapeseed, which is mainly pressed by large oil companies, domestic rapeseed is mainly pressed by small-scale crushers. Taking estimations based on oil yield into consideration, about 5.6 million tonnes of rapeseed oil and 9.5 million tonnes of rapeseed meal are produced each year.
Imported rapeseed pressing is concentrated in Guangdong, Guangxi, Fujian, and Hainan. Guangdong accounts for about 38% of national production; Guangxi for 30%, Fujian for 10%, and Hainan for 16%.
China's rapeseed meal supply consists of three sources, the largest of which is rapeseed meal pressed from domestic rapeseed, with an annual output of more than nine million tonnes, accounting for about 65% of total output. Imported rapeseed meal and locally crushed meal from imported rapeseed account for about 30%-35% each.
In general, the rapeseed meal supplies of China's rapeseed oil companies rise or fall in tandem with rapeseed imports. In the five years before 2022, the country's rapeseed meal imports trended downward, but in 2023, this increased tremendously to 2.7367 million tonnes, an increase of 163% over 2022.
In 2023, China imported 2.3653 million tonnes of rapeseed meal, of which 62% were from Canada. Other major sources were the United Arab Emirates, Ukraine, and Russia.
As far as Canada is concerned, if the anti-dumping case is confirmed, its rapeseed industry will be severely affected. It is not easy for Canada to find other buyers to take up the huge quantity that China buys in the short term. Whether Canada expands crushing capacity domestically or finds new global buyers, all these will take time.
For China, the local rapeseed industry will benefit, while importers will be the most affected in the short term. Nevertheless, they may turn to more trading partners and, especially, increase imports of rapeseed and rapeseed meal from Ukraine and Russia.
About EFL AG-DATA
EFL AG-DATA is a startup incubated by Singapore's Nanyang Technological University's Innovation and Enterprise Company (NTUitive) Incubator Program. It is developing an agricultural hub that will revolutionise the feed-to-meat supply chain in China and Southeast Asia countries through data-driven solutions. EFL's mission is to empower farms through innovative data-based services that solve complex problems and enhance productivity.
- EFL AG-DATA