China's sudden ban on Canadian beef and pork imports "will create a huge financial loss" for the sector that counts the Asian country among its top five international markets, says an industry group.
"It's everybody, right. It's the whole value chain," said Chris White, president of the Canadian Meat Council. Farmers sell their product to packers and then it is shipped overseas, he explained.
"It implicates everyone."
The Chinese Embassy said Tuesday it asked Canada to suspend all meat exports after Chinese customs inspectors detected residue from a feed additive that is restricted in China in a batch of Canadian pork products. A subsequent investigation found forged veterinary health certificates attached to the batch.
The council said the Canadian government is seeking clarification on why beef products have also been suspended since the falsified certificates were for a pork product.
So far this year, Canadian beef and pork exports to China had been experiencing a boon. That's partly because of Canadian meat's world-class reputation, said White.
About 388 per cent more beef and veal was exported to China as of April 2019 compared with the same timeframe last year, and nearly 53 per cent more pork, according to Statistics Canada.
That amounts to roughly $63.6 million in beef and veal, and about $310.2 million in pork exports, according to the agency.
Last year, China was the second-largest market for pork exports, valued at $514.3 million and the fifth-largest for beef, valued at $97.3 million, according to the meat council. The group represents Canada's federally registered meat packers and processors, and suppliers of goods and services in the industry. It focuses on international trade as one of its priorities.
"China is a very important market for Canadian producers," said the Canadian Pork Council in a statement. It is a federation of nine provincial pork industry associations that represent 7,000 farms. The council did not immediately respond to a request for comment.
The pork council noted the increase in sales to China so far this year "was reflected in higher prices for live hogs."
With the ban, companies will be looking at what other markets they could send their product to, said White.
Canada's biggest pork markets aside from China include the U.S., Japan, Mexico and South Korea, according to Statistics Canada's data for this year up to and including April, while beef and veal are also widely exported to the U.S., Japan, Hong Kong and Mexico.
However, it can be difficult to change markets suddenly, White said.
Many countries will already have their quotas filled by others and may not want to spend time building a relationship with Canadian exporters if they believe the China ban is a temporary interruption. Exporters may also have to offer lower prices to these new markets, he said.
The government is taking the matter very seriously and an investigation is underway, International Trade Minister Jim Carr told reporters in Toronto while attending the Canada-India Partnership summit.
Carr said it's too early to say if the government would offer any assistance to meat producers who are likely to struggle in the short-term.
"Obviously, we're looking at the situation over time and we want that time to be as short as possible," he said, adding that the government is trying to get to the bottom of the situation as fast as it can.
White said government support has not been substantively discussed.
The CMC, Canadian Pork Council and Canada Pork International are working closely with government officials to understand the current situation and help identify next steps. The two councils said they are hopeful for a quick resolution.
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