China has lifted a three-year ban on Canadian canola seed imports, Canadian officials said in a statement on Wednesday. The statement didn’t say why the ban was lifted, but low stocks and high prices are likely to make trade difficult.
China is the largest buyer of oilseeds in the world. In March 2019, China stopped buying canola from two Canadian exporters, saying that pests had been found in shipments.
When asked for a comment, Beijing customs officials didn’t answer right away.
At the time, Canada didn’t agree with China’s claims. Political and trade tensions between the two countries were already high after the arrest of Huawei executive Meng Wanzhou in Vancouver, who was being held for extradition to the US.
In a statement, Canadian Trade Minister Mary Ng and Agriculture Minister Marie-Claude Bibeau said, “We are glad that the restrictions have been lifted and that the two companies are back in business right away. This will allow them to export Canadian canola seeds.”
Low stocks of canola, which is crushed into meal to feed animals and oil to cook with, are expected to slow the flow of the oilseed to China.
Canada, which makes and sells the most canola in the world, had its smallest canola crop in 13 years in 2021. This caused buyers to look elsewhere for supplies and pushed global edible oil prices to record highs.
“This will help fix the lack of rapeseed in the United States. Canada and Russia are China’s main sources of rapeseed imports, and Russia’s supply is in danger right now “said Haitong Futures analyst Kong Lingqi.
“With the lifting of restrictions, there should be some trade, but it’s not likely that there will be a lot of imports because Canada doesn’t have a lot of canola this season. Maybe the number of imports will go up after September, “As Canada’s new crop hits the market, she said.
Johnny Huang, co-founder of Sitonia Consulting, said that China’s own canola crop might also slow down the growth of trade flows.
“This year, China is expected to make a record amount of canola. The amount of soybeans grown is also expected to go up this year “said Huang.
This year, prices for all kinds of edible oils, from palm oil to soybean oil, rose to all-time highs because supplies were tight because production was down and key producers cut shipments.
