Alberta Canola continues to work on behalf of growers through the Canola Council of Canada (CCC) on the challenges that persist for canola seed exports to China. Alberta Canola is a core funder of the Canola Council of Canada. The Canola Council is working to keep all stakeholders informed by providing the following information which will be updated as new information is available. This information is also posted on canaolacouncil.org
Alberta Canola is a member of the Candain Canola Growers Organization (CCGA)
November 29, 2019
Watch the video update on China from Canola Council of Canada President Jim Everson and Canadian Canola Growers Association CEO Rick White.
October 28, 2019
Consultation between Canada and China at the World Trade Organization (WTO) occurred today in Geneva, Switzerland. Face-to-face dialogue was an important step towards regaining access for canola seed exports to China.
Since market access issues affecting canola seed trade started in early March, Chinese importers remain unwilling to purchase Canadian canola seed from exporters. The licenses of two companies, Richardson and Viterra, to export canola seed to China remain suspended. Oil and meal exports continue.
Discussions between the governments of Canada and China at the WTO in Geneva are the result of the Government of Canada’s formal request for consultations related to the WTO Sanitary and Phytosanitary (SPS) agreement that obliges all measures restricting trade to be based on science. The canola industry hopes that as a result of this consultation, dialogue results in resolution so that further steps of WTO dispute resolution will not be necessary.
Dialogue and WTO action are helpful, but they are unlikely to re-open the Chinese seed market immediately. The CCC believes more action is necessary to diversify canola markets – improving market access in Asia and diversifying markets in Canada by increasing the amount of canola used in biofuel. Using more canola and vegetable oil in Canada for biofuel represents an important diversification opportunity, one that is entirely within the control of Canadian governments. Going from the current 2% renewable content in diesel to 5% would be a market for 1.3 million tonnes of canola, while at the same time helping Canada significantly reduce greenhouse gas emissions.
Frequently Asked Questions
What is the current situation affecting canola seed exports to China?
Chinese importers are currently unwilling to purchase Canadian canola seed from exporters at this time, although a small amount of canola seed sales have occurred. China has officially taken regulatory action to suspend the licenses for Viterra and Richardson for canola seed. Canadian exporters must be licensed in order to export canola seed to China.
China has been a major market for Canadian canola, accounting for approximately 40% of all canola seed, oil and meal exports. Canola seed exports to China were worth $2.7 billion in 2018. Demand has been very strong until recent disruptions.
Does this affect canola oil and meal exports?
Canola oil and meal are not subject to the same challenges as seed. Oil exports continue to occur and are being monitored closely. Canola meal shipments remain unaffected.
What are the license suspensions based on?
China has indicated they have a quality concern with Canadian canola seed related to specified quarantine pests that include weed seeds and plant diseases. These are identified in the public notices of non-compliance issued to Richardson and Viterra by China’s customs agency. The Canadian Food Inspection disagrees with the assessment of China’s customs agency.
Technical discussions about these pests of concern have not indicated that an immediate resolution is possible. We are confident in the quality of Canadian canola. Our canola consistently meets the requirements of countries around the world.
Has a third company been suspended?
A third company has been issued a notice of non-compliance but not a suspension of their export license. Non-compliances are issued directly from China’s customs agency to the company involved and the Canadian Food Inspection Agency. This information is confidential, and shared only between the company and the Government of Canada.
What does this mean for existing contracts and deliveries?
Grain handlers have confirmed they are honouring all contracts for seed delivery, though this may involve some delays in delivery to the grain elevator. For contracts where a grower does not have the grade contracted for delivery, the grower will need to work directly with their grain buyer.
What does this mean for new contracts and deliveries?
China represents approximately 40% of canola exports and limited sales of seed to China are occurring. This impacts the demand for and value of canola. Canola seed exporters are supplying customers in other countries such as Japan, Mexico, Europe, Pakistan, the UAE and Bangladesh, who value high quality Canadian canola. Growers are encouraged to contact their local grain buyer to discuss marketing options.
For those managing longer-term storage of canola, the Canola Council’s Canola Encyclopedia offers a comprehensive resource of best management practices for safe, on-farm canola storage.
Should growers cut back on growing canola?
Growers, as always, need to make their own choices, and consider many factors when making seeding decisions. We believe the fundamentals of trade with China are strong – we have an industry strategy to ensure a sustainable and growing supply of high quality canola in Canada, and growing demand in China for high quality oil and protein. We have a challenging situation in China at this time but believe the basis for trade in canola between the two countries remains solid.
What relief is being provided to canola growers who are feeling financial pressure?
On June 3, the Government of Canada announced it has implemented the new regulations necessary to increase loan limits under the Advance Payments Program (APP) as announced on May 1. Growers can contact their APP provider for more details, and can read the news releases from the Government of Canada and Canadian Canola Growers Association.
How is the Canola Council responding?
The Canola Council, which includes growers, continues to work closely with the Government of Canada to find science-based solutions and resume stable trade. This includes co-chairing the Government of Canada working group on canola. The Canola Council believes more action is necessary to diversify canola markets, including enhancing market access in Asia and diversifying markets in Canada by increasing the amount of canola used in biofuel. We will continue our efforts to focus attention in Ottawa on resolving this issue.
What opportunity does biofuel offer for Canadian canola?
Using more canola and vegetable oil in Canada for biofuel represents an important diversification opportunity, one that is entirely within the control of Canadian governments. Going from the current 2% renewable content in diesel to 5% would be a market for 1.3 million tonnes of canola, while at the same time helping Canada significantly reduce greenhouse gas emissions. Internationally, the EU biofuel market is another important opportunity for Canadian canola. The Canola Council is providing growers with information around the opportunities for export to the EU market and gaining certification at www.canolacouncil.org/eucertified.
Who is involved in the Government of Canada working group on canola? What is its role?
The working group is co-chaired by the deputy minister of Agriculture and Agri-Food and the president of the Canola Council of Canada, and includes the president of the Canadian Food Inspection Agency, the president of the Canadian Canola Growers Association, deputy ministers from the provinces of Alberta, Saskatchewan and Manitoba as well as other senior government and industry officials.
The Canola Working Group remains focused on regaining access to the Chinese market and continues to meet regularly. It is actively working on supporting predictable, rules-based trade – particularly as China has not responded to requests for a Canadian delegation to visit to understand the scientific basis behind China’s actions. The Group is also working on diversifying canola exports and is reviewing a range of activities that include enhancing market access and promotion activities in alternative Asian markets where there’s opportunities for canola seed, oil and meal. Diversifying markets in Canada by increasing the amount of canola used in biofuel is also being discussed. Supporting producers is top of mind for the Group and efforts are underway to monitor market conditions closely, so that if action is needed in the future it is timely and effective.
What are the next steps that the Canola Council is recommending?
As we focus attention in Ottawa on resolving this issue as soon as possible, the Canola Council believes that more action is necessary to restore access to the Chinese market, engage alternative markets and support canola producers dealing with significant market uncertainty. This includes advancing the following:
1) Diversify markets
- Domestically – Increasing the renewable content in diesel to 5% would equal 1.3 million tonnes of canola utilization and reduce greenhouse gases by 3.5 MT per year.
- Internationally – Efforts to expand exports of seed, oil and meal to new and existing customers by supporting industry needs such as bolstering capacity in Asia to resolve barriers to trade and develop markets.
2) Support producers through this unprecedented uncertainty
- On May 1, the Government of Canada announced its intention to increase loan limits under the Advance Payments Program (APP). The new regulations were implemented on June 3.
- Work is ongoing to monitor market conditions closely, so that if action is needed in the future it is timely and effective. This includes asking for flexibility to adjust the current suite of business risk management programs, should they be needed.
- The Canadian Canola Growers Association is leading producer support efforts, more information can be found on their blog.
Has the Government of Canada brought this issue to the WTO?
WTO consultations between Canada and China took place on October 28 in Geneva, providing a face-to-face dialogue on the scientific basis for China’s measures. The canola industry hopes that this dialogue leads to the reopening of our seed exports so that further steps of WTO dispute resolution will not be necessary.
Discussions between the governments of Canada and China at the WTO in Geneva are the result of the Government of Canada’s formal request for consultations under the WTO’s Sanitary and Phytosanitary (SPS) agreement on September 6. The agreement obliges all measures restricting trade to be based on science. Read the Government of Canada statement and CCC release.
Earlier this spring, Canada raised concerns about China’s treatment of Canadian canola at the WTO, pressing China to show evidence of their quality concerns. The Canadian ambassador told WTO members at the Council meeting on May 7, including China, that, “Canada has repeatedly asked China for the scientific evidence that supports its findings and the measures taken – but China has not been forthcoming in providing this information.” During his remarks the ambassador highlighted how an “open and predictable rules-based international trade is the only way global commerce can succeed.” After noting that Canada has tested the shipments in question twice and found they comply with Chinese requirements, Canada asked China to “engage in solution finding” as Canada has done using every available channel.
Where can I find more information?
For more information, the Canola Council has posted the following updates/statements on this issue:
- September 6: Canola Council supports Government of Canada’s request for WTO consultations with China
- September 4: Canola Council statement on the appointment of an Ambassador to China
- May 1: Helpful support for canola producers
- April 17: Canola Council urges stronger measures to support rules-based trade
- April 8: Government of Canada working group on canola collaborating to restore market access for Canada’s canola seed to China
- April 1: Recording of Canola Council president Jim Everson and CCGA CEO Rick White speaking to MPs at the House of Commons Standing Committee on Agriculture
- March 28: Canola Council meets with Trade Diversification Minister Jim Carr
- March 21: Challenges persist for canola seed exports to China
- March 7: Canola Council expresses confidence in quality of Canadian canola
- March 6: Canola Council of Canada statement on trade with China
The Canadian Canola Growers Association (CCGA)
Canadian Canola Growers Association (CCGA) represents 43,000 canola farmers across Canada and is the national grower association representing Canada’s five provincial canola grower associations. CCGA is also a member of the Canola Council of Canada.CCGA is keenly aware of the impact that market access issues with China are having on canola farmers and is communicating these concerns to the highest levels of Government
- September 6 – WTO Consultations with China Important Step for Canada’s Canola Farmers
- September 4- Appointment of Ambassador to China Important Step in Resuming Canola Trade
- June 4: Representing canola farmers at the Canola Working Group
- June 3: Higher Cash Advance Limits Available to Farmers within Days
- May 1: Cash Advance Program Enhancements Support Farmers
- April 10: China Trade Update
- April 1: Bringing the Farmer Voice Forward on China
Government of Canada updates:
- September 6 – Statement by Minister Carr on Canada taking WTO action for canola industry
- September 4 – News release: Prime Minister Announces Appointment of Dominic Barton as Ambassador to China
- June 13 -News release: Canada backs Canadian canola farmers and exporters with $150 million in insurance support
- June 3 – News release: Government of Canada Implements New Regulations to Enhance Advance Payments Program
- May 1 – News release: Government of Canada Taking Action for Canada’s Canola Sector
- April 8 – News release: Government of Canada working group on canola collaborating to restore market access for Canada’s canola seed to China
- April 1: Speech by Minister Carr
- April 1: Speech by Minister Bibeau
- April 1: Government of Canada canola working group
- March 29: Ministers Bibeau and Carr visit Saskatchewan in support of Canada’s canola and grain producers