Beijing, China
On Tuesday, China said it will proceed with an anti-dumping probe into canola import from Canada, a decision made shortly after Canada set tariffs on Chinese electric vehicles. This triggered a rise in domestic rapeseed oil futures to a one-month high, following the announcement.
Canadian Farm Minister Lawrence MacAulay criticised the investigation, promising that Ottawa will follow the developments and provide its agricultural producers with support. MacAulay took to social media to state, “We are protective of our farmers and the principle of fair trade.”
It is a result of emerging trade war between enough countries and my country. Last week Canada decided to put a 100% on Chinese electric vehicles and 25% on Chinese steel and aluminum. For its part, China’s commerce ministry dismissed Canada’s action as discriminative and threatened to seek redress through the WTO.
China’s commerce ministry also accused some Canadian chemical products of undergoing inspection. The country consumes more than 50% of its canola from Canada, meaning that is has become influential force in the oilseed market. In 2023 the exports of canola from Canada to China was CUSD5 billion (USD 3. 7 billion).
The announcement made China’s rapeseed meal futures on ZhengZhou Commodity Exchange rise by 6% to its highest level since early August. On the other hand, the ICE canola contract for November delivery declined by 7 percent to USD 569. undefined
China’s ministry alleged that Canadian canola has flooded the market, the quantity of imports has risen by 170% while the cost has reduced. It also maintains that this has had a negative impact on China’s domestic rapeseed industry for the following reasons. “The local producers have incurred severe losses due to the increased availability of cheaper Canadian canola,” the ministry explained.
China’s imports of canola from Canada have grown rapidly, accounting for 94% of its total canola imports in 2023. In contrast, Canadian imports of Chinese automobiles, primarily electric vehicles from Tesla's Shanghai factory, surged by 460% year-over-year in 2023.
In response to the trade tensions, analysts suggest that China might seek alternative canola sources, such as Australia and Ukraine. However, Australia's exports to China have been minimal due to disease concerns, and European production has been hindered by adverse weather.
As the situation develops, all eyes will be on the potential impacts on both Canadian agriculture and global trade dynamics.