Canadian canola meal shipments to China jumped to their highest level in five years from January to August 2016, the Globe and Mail wrote on 14 November.
The country shipped 415,000 tonnes of canola meal to China worth CAD$132.1M (US$99M) in that period, the most since 2011 and following zero shipments in 2015, according to Canadian Oilseed Processors Association (COPA).
The canola meal demand reflected a trade dispute throughout much of this year between the two countries over canola seed, the report said.
China had planned to lower the amount of foreign material (dockage) in Canadian canola imports from 2.5% to 1% as it was concerned that black-leg disease might spread from Canadian canola shipments to Chinese canola.
The dispute created additional demand for canola meal until it was resolved in September, the Globe and Mail said, when the countries agreed that Canadian canola seed imports would continue under current terms while additional research was conducted to determine whether there was a link between the level of dockage and the risk of disease transmission (see News, OFI November/December 2016).
Beijing also announced in September anti-subsidy duties on imports of US distillers’ dried grains (DDGs), a byproduct of corn-based ethanol used as an animal feed ingredient.
This could also build demand for canola meal, the report quoted an analyst with consultancy JCI in Shanghai as saying.
Strong meal demand had lifted crushers’ profits, with Canadian canola crush margins at the start of November more than double those of a year ago, ICE Futures Canada said.
COPA executive director Chris Vervaet said Canadian crushers had steadily expanded capacity, with Cargill opening a new Alberta plant in 2015, and Richardson International expanding a facility in the province.
Several Canadian plants were registered this year for trade by Chinese authorities, a process that took more than a year for some.