December 14, 2009

 

Canada canola exports steady but lack of China demand weighs

Canadian canola exports continue to move forward at a steady pace but aren't as large as they could be due to new Chinese restrictions.

 

As of Nov. 29, Canada had exported 2.443 million tonnes of canola during the 2009-2010 crop year, which is only one or two shipments behind the 2.498 million tonnes exported by the same point the previous year, according to data from the Canadian Grain Commission.

 

The export lineup out of the west coast is also large, with over 400,000 tonnes of canola set to move over the next month, according to the Canadian Ports Clearance Association.

 

In addition to the routine business to Japan, the export lineup for the next month also includes shipments to Pakistan, Bangladesh and Dubai, said canola merchant Adrian Man of Richardson International Ltd.

 

He described those destinations as "occasional buyers," which were helping offset the lack of business to China.

 

Canada exported 2.8 million tonnes of canola to China in 2008-2009, and the country had been poised to be another large customer this year. However, Canadian canola has been all but shut out of China since the country's new import requirements went into effect on Nov. 15. China is now only allowing canola shipments infected with the blackleg fungus into a few select ports, far away from the country's own canola growing and processing areas.

 

The Canola Council of Canada has estimated that the Chinese measures will restrict 70% of Canada's canola sales to China.

 

While the lack of Chinese business is freeing up more canola to go to other markets, Man said the overall export program was not as large as it would be if China was still participating.

 

Senior Canadian government officials, including Prime Minister Stephen Harper and Agriculture Minister Gerry Ritz, were recently in China on a trade mission and discussed the issue of canola exports while they were there.

 

While the discussions did not lead to any concrete results in terms of broadening the access for Canadian canola, Man said the fact that the highest levels of government were involved was a good sign that a resolution will eventually be found.