May 1, 2019 – Today’s announcement that canola producers will be supported during uncertainty is welcomed news for the canola sector. While market access issues continue to block canola exports to China, Canada’s single largest export to that market, early action to support growers will help until the issues are resolved and canola markets are diversified.
“Timely action to help producers deal with unprecedented uncertainty is good news,” says Jim Everson, president of the Canola Council of Canada (CCC). “With our largest market for canola seed effectively closed, it’s important for everyone that producers can pay their bills while efforts are made to resolve the issue.”
Since market access issues affecting canola seed trade started in early March, Chinese buyers remain unwilling to purchase Canadian canola seed and the licenses of two companies, Richardson and Viterra, to export canola seed to China have been suspended. While technical discussions have taken place between the Chinese and Canadian governments, the scientific basis for China’s actions remain unclear.
Today’s announcement by agriculture minister Marie-Claude Bibeau provides additional credit to producers through the Advance Payments Program, expanding available credit to $1 million and providing up to $500,000 interest-free for canola production. Trade diversification minister Jim Carr also announced efforts to expand exports to other Asian markets.
“It’s an ideal time to bolster our efforts to provide our top quality products to other customers,” says Everson. “We need to seize the opportunity to develop markets, especially in Asia, building on our trade agreements.”
In light of how technical engagement to date has not resolved the issue, it’s clear that industry and government need to work together on a comprehensive plan to develop alternative markets. Through the industry-government canola working group, the CCC has outlined what’s required to diversify canola exports.
Opportunities include risk coverage for new canola buyers, an enhanced market diversification presence in Asia to seize opportunity created by the Comprehensive and Progressive Trans-Pacific Partnership, as well as utilizing canola oil in Canada for biofuel that lowers greenhouse gas emissions. One way the CCC is proposing to expand sales to Asian markets is to establish a government-industry export diversification office in the region to address market access issues and enhance promotion activities.
While producer support and market diversification are important, regaining access to the Chinese market remains a priority.
“We need to consider all options to resume seed exports to China,” says Everson. “Predictable, rules-based trade is critical to Canadian agriculture and China remains an important market.”
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.
The Canola Council of Canada is a full value chain organization representing canola growers, processors, life science companies and exporters. Keep it Coming 2025 is the strategic plan to ensure the canola industry’s continued growth, demand, stability and success – achieving 52 bushels per acre to meet global market demand of 26 million metric tonnes by the year 2025.
For more information on trade with China, check out our centralized resource for common questions and updates: Canola & China – What growers should know
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