July 27, 2011


China extends trade for Canadian canola



China has agreed to continue accepting Canadian canola for another year, while the two countries work on a long-term solution to a nearly two-year-old trade dispute.


In 2009, China restricted imports of Canadian canola seed with the fungal disease blackleg, but later allowed shipments to designated Chinese ports away from China's rapeseed growing areas.


That market access was to expire after the 2010/11 crop marketing year, which ends in Canada on July 31, but will now continue through the 2011/12 year.


"This is tremendous news for our canola producers and processors and is a testament to our strong and collaborative working relationship with China," Canadian Agriculture Minister Gerry Ritz said in a statement.


Canada is the world's leading shipper of canola, which is crushed to make vegetable oil and livestock feed.


China is a key buyer of Canadian canola, albeit in varying volumes from year to year, and a major importer of canola oil. Canada's canola product exports to China amounted to CAD1.8 billion (US$1.9 billion) in 2010, according to the Canadian government.


Since China put its restrictions in place, it has imported more Canadian canola oil, which is a higher-value product than canola seed. From August 2010 through April 2011, China bought 622,000 tonnes of canola oil from Canada, accounting for more than one-third of Canada's total canola oil exports.


China imported about 633,000 tonnes of canola seed through April of the 2010/11 crop year, well off the pace of the previous two years, according to industry data.


Talks between Canada and China will focus on taking steps to assure China that its rapeseed crop is not at risk from Canada's canola, said David Anderson, the parliamentary secretary for Canada's agriculture and natural resources departments.


"The good thing is they have been open to this agreement, open to extending it," Anderson said. "Obviously our canola is as important to them as their market is important to us."


Blackleg, a fungal disease that can reduce yields or kill plants, is common in Canada and much of the world.


Anderson said he did not know if China had also extended market access to Australian canola, which faces the same restrictions.


The industry group Canola Council of Canada, which has been closely involved in talks with China, said the two countries are jointly taking on research to reduce the threat blackleg poses.

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