On Tuesday, an emergency meeting of the Standing Committee on Agriculture and Agri-Food was conducted to discuss the latest developments surrounding China's actions to halt the import of Canadian canola. As well, the Financial Post ran a piece pointing to the growing "angst" felt by Canada's soybean growers over the possibility that this trade action will spread. "We're not in the canola dispute now, but who knows what happens tomorrow," stated Ron Davison, executive director of Soy Canada.
Meanwhile, a Tuesday release of a USDA attache report, China: Oilseeds and Products Annual, includes 2019-20 estimates that includes an increase in both canola/rapeseed and soybean imports. The study is titled Muted Demand Growth Due to African Swine Fever, Yet Imports Remain Essential.
The study stated, "Although pork remains the preferred meat for most Chinese consumers, the ASF (African swine fever) outbreak has bolstered demand for chicken, beef and seafood out of unfounded health fears, price considerations, and a desire to diversify the diet." While the country's oilseed production is forecast to be stagnant, "China will continue to rely on oilseed imports from Brazil, the United States, Argentina, and Canada."
As seen on the attached chart, 2019-20 soybean imports are forecast to grow by 4%, to 91.5 million metric tons (blue line, primary vertical axis), while remaining below the 2017-18 record high of 94.095 mmt. A similar increase also forecast for canola/rapeseed imports. The agency has estimated 2018-19 canola imports to 5.5 mmt, up 200,000 mt from the USDA's official estimate, while 2019-20 imports are forecast 200,000 mt higher, up 3.6% to a record 5.7 mmt.
This report noted that China has halted Canadian canola in March, while also estimating that Canada has supplied 93.4% of China's imports in 2017-18. The USDA also reports that China imported a record 602,000 mt of Canadian canola in the month of January 2019.
In Tuesday's National Post, business writer Diane Francis states that Canada has leverage against China and the Prime Minister should stop "dithering" and use them. This includes a tariff on Canada's imports from China, a ban on Huawei's "sensitive" telecom work in Canada and financial support for exporters to pursue other markets.
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, located on the lower-right side of your DTN Canada Home Page.
Cliff Jamieson can be reached at email@example.com
Follow him on Twitter @Cliff Jamieson
© Copyright 2019 DTN/The Progressive Farmer. All rights reserved.