Canadian crushing near capacity

Canadian oilseed crushers are working at almost full capacity, which is limiting their ability to offset lost seed sales to China by processing more, reported the Manitoba Co-operator on 6 May.

China stopped buying Canadian canola in March, with officials citing insect and weed contamination in shipments as the reason.

However, the Canadian Food Inspection Agency (CFIA) has said China’s complaints do not match what it found in export samples it inspected.

It is widely suspected that China’s move is linked to Canada’s arrest of Meng Wanzhou, vice president of Chinese technology firm Huawei. Meng, who is the daughter of Huawei’s founder, was arrested on 1 December at the request of US tax authorities.

China is Canada’s biggest canola seed buyer, accounting for 40% of canola seed exports in 2018, the Manitoba Co-operator said. It was also the second largest buyer of Canadian canola oil and meal, after the USA.

“Canola oil and meal are still being exported to China but because Canadian crushers are working at almost full capacity, there’s not much opportunity to offset the loss of canola seed exports to China with increased shipments of oil and meal,” the newspaper wrote.

Canadian Oilseed Processing Association executive director Chris Vervaet said Western Canada’s 11 canola crushing plants were operating at 80-85% capacity, and sometimes even up to 90%. The country had 10.7M tonnes of crushing capacity, he added.

In the meantime, Federal Agriculture Minister Marie-Claude Bibeau announced extended financial aid on 1 May to help canola farmers affected by the dispute.

Farmers can now borrow up to CAD$1M (US$742,000) through the Advanced Payment Program, up from CAN$400,000 (US$297,000) Canola producers can borrow up to CAD$500,000 (US$371,000) of their loans interest-free, up from a previous CAN$100,000 limit (US$74,200) Farmers will also have an extra two months to enrol in AgriStability, an insurance programme that supports farmers experiencing a loss in profits, with a new deadline of 2 July.

"We stand shoulder-to-shoulder with Canada's canola producers and farm families across the country and we will continue to listen to their needs,'' Bibeau said.