Media sources may have jumped the gun on Monday by adding other Canadian grains to the list banned by China's importers, although the issue continues with China adding Viterra to the list of importers that are banned from unloading canola in China, a list that already included Richardson International.
In a March 26 press conference in Winnipeg, Prime Minister Justin Trudeau stated, "There is significant interest in sending a high-level delegation to China to talk about the extraordinary work that we do in terms of oversight inspection and the science around ensuring the safety of and quality of Canadian canola." It could prove wishful thinking to address this issue focusing on science when the real problem has no links to science.
Speculation continues as to the list of commodities that could be added to China's import ban, which includes not only the principal field crops but also meat and seafood products.
While industry and politicians weigh possible options, Lynette Ong of the University of Toronto's Munk School of Business told the Canadian Broadcasting Corporation (CBC) that gains can be achieved by banding with other countries that have faced similar circumstances, naming Norway and Australia.
Of the 16 grains and oilseeds reported in the Canadian Grain Commission's Exports of Canadian Grain and Wheat Flour report for January, or the first six months of the 2018-19 crop year, bulk shipments of wheat through licensed facilities to China reflect 11.7% of total shipments of wheat. Meanwhile, 59.1% of the barley, 53.4% of the flax, 46% of the canola, 92.4% of the soybeans and 65.5% of the dry peas have been shipped to China this crop year.
The attached chart shows the sudden rise in volume of dry peas sent to China in recent years, linked to import restrictions announced by India. In the first six months of this crop year, 65.5% of dry pea shipments have been shipped to China.
On March 27, the Statistics Canada will release merchandise trade data for the month of January and this analysis can be expanded with a look at grain products and the export of meat products.
DTN 360 Poll
This week's poll asks if you intend to reduce canola acres planted in 2019 due to the current trade issue with China. You can weigh in with your thoughts on this poll on the lower-right side of your DTN Canada Home Page.
Cliff Jamieson can be reached at firstname.lastname@example.org
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