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 Canadian Canola Growers Association (CCGA)
Since market access issues affecting canola seed trade started in early March, the licenses of two companies, Richardson and Viterra, to export canola seed to China remain suspended. Other exporters are seeing some purchases of canola seed, about 30 per cent of normal seed exports to China. Oil and meal exports continue.
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 two per cent renewable content in diesel to five per cent 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?
Since market access issues affecting canola seed trade started in early March 2019, the licenses of two companies, Richardson and Viterra, to export canola seed to China remain suspended. Other exporters are seeing some purchases of canola seed, about 30 per cent of normal seed exports to China. Oil and meal exports continue.
Canola seed exports to China were down approximately 70 per cent in 2019 due to trade disruptions, resulting in an estimated $1 billion in lost revenue from canola. Prior to 2019’s market access challenges, China accounted for approximately 40 per cent of all Canadian canola seed, oil and meal exports. Canola seed exports to China were worth $2.7 billion in 2018.
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.
What does this mean for new contracts and deliveries?
Limited seed sales to China 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, which 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?
In 2019, the Government of Canada implemented new regulations to increase loan limits under the Advance Payments Program (APP). Growers can contact their APP provider for more details, and find more information from the 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. 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 two per cent renewable content in diesel to five per cent would be a domestic 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.
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 five per cent 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 June 3, 2019 the Government of Canada implemented new regulations to increase loan limits under the Advance Payments Program (APP). 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, 2019 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, 2019. The agreement obliges all measures restricting trade to be based on science. Read the Government of Canada statement and CCC release.
In the spring of 2019, Canada raised concerns about China’s treatment of Canadian canola at the WTO, pressing China to show evidence of their quality concerns. At the WTO General Council meeting on May 7, 2019, the Canadian ambassador told WTO members, 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.
Canola Council news releases and updates:
- April 28, 2020: Recording of grower update call on trade with China and COVID-19
- March 31, 2020: Canola Council statement on state of market access to China
- February 27, 2020: Action needed as anniversary of China canola trade dispute approaches
- November 29, 2019: Video update on trade with China
- September 6, 2019: Canola Council supports Government of Canada’s request for WTO consultations with China
- September 4, 2019: Canola Council statement on the appointment of an Ambassador to China
- August 29, 2019: Canola Watch podcast update on trade with China with Jim Everson, CCC president, and Rick White, CCGA CEO
- May 1, 2019: Helpful support for canola producers
- April 17, 2019: Canola Council urges stronger measures to support rules-based trade
- April 8, 2019: Government of Canada working group on canola collaborating to restore market access for Canada’s canola seed to China
- April 1, 2019: Canola Council president and CCGA CEO speaking to MPs at the House of Commons Standing Committee on Agriculture
- March 28, 2019: Canola Council meets with Trade Diversification Minister Jim Carr
- March 21, 2019: Challenges persist for canola seed exports to China
- March 7, 2019: Canola Council expresses confidence in quality of Canadian canola
- March 6, 2019: Canola Council of Canada statement on trade with 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