China mentioned on Tuesday it deliberate to start out an anti-dumping investigation into canola imports from Canada, after Ottawa moved to impose tariffs on Chinese language electrical automobiles, lifting costs of home rapeseed oil futures to a one-month peak.
Canadian Farm Minister Lawrence MacAulay mentioned the transfer was “deeply regarding”. In a submit on the X social media community, he mentioned Ottawa was intently following the case and would defend and assist the farm sector.
Canada, following the lead of america and European Union, introduced final week a 100% tariff on imports of Chinese language electrical automobiles and a 25% tariff on imported metal and aluminium from China.
“China strongly deplores and firmly opposes the discriminatory unilateral restrictive measures taken by Canada towards its imports from China regardless of the opposition and dissuasion of many events,” a commerce ministry spokesperson mentioned in a press release.
The ministry mentioned China will even provoke an anti-dumping investigation into some Canadian chemical merchandise.
Greater than half of canola produced in Canada makes its option to China, the world’s greatest oilseed importer. Canola, additionally known as rapeseed for sure variants, is used as a cooking oil and in a variety of merchandise together with renewable fuels.
The Canola Council of Canada mentioned it was assured that China’s probe would present that Canadian producers had been taking part in by the foundations. In a press release, it mentioned Canadian exports of canola to China final yr totaled Canadian greenback 5.0 billion ( USD 3.7 billion).
China’s rapeseed meal futures on the Zhengzhou Commodity Change jumped 6% to 2,375 yuan ( USD 333.56) per metric ton following the announcement, hitting its highest since Aug. 6.
The ICE canola contract for November supply dropped to its every day restrict of USD 45, or 7%, to USD 569.7 per metric ton.
“Canada’s canola exports to China have elevated considerably and are suspected of dumping, reaching USD 3.47 billion in 2023, with a 170% year-on-year enhance in quantity and a steady decline in costs,” the ministry mentioned.
“Affected by the unfair competitors of the Canadian aspect, China’s home rapeseed-related industries continued to undergo losses,” it mentioned.
China’s rapeseed meal costs have plunged 22% to date this yr amid plentiful oilseed provide and rising home manufacturing.
“The present (edible oil) home consumption is just not sturdy, and there may be an plentiful provide of home shares,” mentioned Ma Wenfeng, senior analyst at Beijing-based agriculture consultancy Beijing Orient Agribusiness Consultancy.
China imports its canola predominantly from Canada, adopted by Russia and Mongolia.
“Arrivals from Canada have been rising at a quick price,” Ma mentioned.
The world’s second largest financial system imported 5.5 million tons of canola in 2023, valued at USD 3.72 billion. Imports from Canada accounted for 94% of the entire.
Comparatively, the majority of China’s electrical automobile exports to Canada is from Tesla’s Shanghai manufacturing facility and native Chinese language corporations haven’t any massive publicity to that export market but.
Canadian imports of vehicles from China to its largest port, Vancouver, jumped 460% yr over yr to 44,356 in 2023, when Tesla began transport Shanghai-made EVs to Canada.
The Chinese language spokesperson mentioned it intends to resort to the World Commerce Group dispute settlement mechanism for Canada’s related practices. China has additionally initiated commerce investigations on imports of pork, brandy and dairy from the European Union in response to curbs on its electrical automobile exports.
ALTERNATIVE SUPPLIES
China had focused Canadian canola in earlier commerce tensions. In 2019, it suspended two Canadian canola exporters earlier than eradicating the restrictions three years later.
Analysts mentioned China may flip to Australia and Ukraine for different provides, particularly as Australia’s canola manufacturing is ample. Canola manufacturing in Europe has been hit by poor climate whereas China’s agriculture commerce with Ukraine is restricted.
“We count on China to purchase bigger volumes from Australia if restrictions on Australian canola are eased,” mentioned Ole Houe, director of advisory providers at IKON Commodities in Sydney.
“As of now Australia’s canola exports to China are negligible, nearly 500 tons because the starting of 2024,” Houe mentioned.
China’s imports of Australian canola have been restricted resulting from issues about blackleg illness.
