The end of China’s ban on Canadian meat provides some optimism for canola producers still enduring trade restrictions, according to the head of the Agricultural Producers Association of Saskatchewan (APAS).
On Tuesday, the Canadian government announced China has ended a roughly four-month suspension of its imports of Canadian pork and beef. Restrictions on Canada’s canola, imposed in March, continue.
“Anything when it comes to trade now, it’s linked,” said Todd Lewis, APAS president and a farmer south of Regina.
Lewis acknowledged an outbreak of African swine fever in China’s domestic pork supply put more pressure on the country to import pork.
“Hopefully it will spill over into the canola trade as well.”
The diplomatic spat with China followed Canada’s detention of Huawei CFO Meng Wanzhou in December 2018.
Within days, China detained two Canadians in a move widely viewed as retaliation. Within months, China blocked Canadian canola seed imports, stating some shipments were contaminated with pests.
Canadian Canola seed exports to China were worth $2.7 billion in 2018 and demand for the product was strong until the recent disruption, according to the Canola Council of Canada. The organization stated in September that canola prices had fallen about 10 per cent, amounting to a $1 billion hit to the Canadian economy.
During the past nine months in Saskatchewan, there has been a $720 million loss in canola sales to China, said Chris Dekker, president and CEO of the Saskatchewan Trade and Export Partnership.
China’s recent decision on pork and beef “bodes well” for canola, but there’s still a “long road to go”, he said.
“It signals a thawing of the tension, but at the same time, we have to be realistic as well,” Dekker said.
The diplomatic strain with China has caused producers and exporters to turn to other regions like the European Union, where Dekker said canola seed sales have increased “dramatically.”
Still, China is too large a market to be completely replaced, according to Dekker.
“We have to open that up and the quicker the better.”