China targets Canadian canola in response to EV tariffs

China’s domestic canola industry is suffering because of unfair competition in Canada, the commerce ministry said

China is retaliating against the Canadian ag industry after Prime Minister Trudeau announced tariffs on imported Chinese electric vehicles and steel and aluminum.

Chinese officials say the Chinese government will launch an anti-dumping probe (determining whether goods being sold to a country are being sold below the price in the producer country) into Canadian canola.

Recent Chinese reports indicate “Canada’s canola exports to China have increased significantly and are suspected of dumping, reaching US$3.47 billion in 2023, a year-on-year increase of 170%, and prices have continued to fall,” a spokesperson for the Chinese commerce ministry said.

“Affected by Canada’s unfair competition, China’s domestic canola-related industries continue to suffer losses.”

This announcement had different effects on canola sectors.

In China, canola futures on the Zhengzhou Commodity Exchange increased by almost 5.5 per cent to $331.80 per metric ton.

In Canada, prices went down before recovering.

“We closed Friday at $614.7/ (metric ton) and after the long weekend, it went as low as $569.7/MT following market opening today,” said Abhinesh Gopal, a commodity risk analyst with Farms.com Risk Management. “Basically, it traded limit down due to the China shock. And now it’s up to $592.5/MT.”

Canada’s ag sector and officials are watching the situation closely.

The Canola Council of Canada (CCC), for example, is confident any investigation will show Canada’s practices are above board.

“China is an important and valued market for Canadian canola,” Chris Davison, president & CEO of the CCC, said in a statement. “We are confident that an investigation into Canada’s canola trade with China will demonstrate alignment with and reinforce our support for rules-based trade.”

Agriculture and Agri-Food Minister Lawrence MacAulay reaffirmed Canadian canola’s quality, and is working with his colleagues on this file.

“Canadian canola is the best in the world and our producers depend on, and play by, a rules-based global trading order that provides reliable market access,” he said on X. “Today’s announcement is deeply concerning, and I am working with my colleagues across government and in the sector to monitor developments closely. The quality of Canadian canola is well-known around the world. We will continue to defend and support the sector every step of the way.”

Farmers are concerned about how this recent disagreement with China will affect them.

Trudeau’s “hissy fit with China cost us a dollar a bushel on canola overnight. This could be brutal,” Darcy Sarafinchan, a producer from Lavoy, Alta., said on X.

China also announced it will launch investigations into “relevant Canadian chemical products, based on applications by domestic industries.”

China has targeted Canadian ag in the past.

Following Canada’s arrest of Huawei executive Meng Wanzhou on Dec. 1, 2018, for example, China blocked imports of Canadian canola and all Canadian meat, citing impurities and labeling issues, though never outright linking the two issues.