Fears for Canada’s canola sector rise over arrest

Canada’s canola sector is becoming increasingly concerned over growing political tensions between the country and China.

The fears come after the arrest of a Chinese executive in January in Vancouver, which was the result of a US extradition request. “Everybody is very concerned about it,” a senior Canadian grain company official told Commodity News Service Canada. “If the conflict isn’t resolved, (canola) will be the obvious target, and that’s a deep concern to everybody.”

Meng Wanzhou, an executive and daughter of the founder of Chinese communications company Huawei, was arrested in Vancouver at the request of the USA in December for fraud charges. Beijing then detained two Canadian diplomats in the same month for allegedly endangering national security. Tensions increased after a Chinese court sentenced a Canadian to death on drug charges in January.

The general manager of Alberta Canola, Ward Toma, said “Right now, it doesn’t appear that these diplomatic tensions are causing issues on the food export side, but we’re watching it closely.”

“A positive note is they [China] recently approved some canola traits that have been sitting in their pipeline for a while. They stuck to their timeline and didn’t delay it,” he added.

The trade war between the USA and China that began last year has had a detrimental effect on the exports US soyabean, opening up the possibility of Canada seeing increased canola sales, reported Alberta Farmer. However, the US extradition request for Wanzhou had become politicised by US President Donald Trump.

“We’ve been drawn into this conflict between the United States and China, and China doesn’t understand our legal system,” said Toma. He added that mixing politics and trade was unfortunate as Chinese buyers were good customers and “have a need and a want for the product that we have.”

Exporters had reportedly experienced longer unload times and inspections in Chinese ports but this sort of non-tariff barriers was not a rarity, said Alberta Farmer.

In the 2017/18 crop year, China bought 4.3M tonnes of Canadian canola seed out of the country’s total exports of 10.7M tonnes.

Canada is currently the highest global producer and exporter of canola oil, producing 19.2M tonnes in 2018, reported Statistics Canada in July.