【By Guan察者网, Ruan Jiaqi】

Last week, China announced a 75.8% deposit on imported canola seeds from Canada. Some Canadian industry players had hoped that China could not find alternative sources in the short term. However, a deal disclosed by British media may come as a surprise to them.

On the 18th local time, Reuters cited two traders' reports stating that after China took temporary measures against Canadian canola seeds, COFCO has ordered about 50,000 tons of Australia's new season canola seeds, which are expected to be available in October. Another source told U.S. media Bloomberg that after the announcement, this Chinese trading giant accelerated its steps to ensure supply from Australia.

According to two sources who directly know about the transaction, COFCO's recent purchase of canola seeds is expected to be shipped between November and December, and they are currently negotiating more transactions. The sources said that the purchase price was below $600 per ton (including freight).

The report pointed out that this transaction will mark the first time in five years that China imports canola seeds from Australia. Australia is the world's second-largest canola seed exporter, but it has been excluded from the Chinese market since 2020, mainly because its products did not meet China's import standards.

Reuters had quoted Australian industry sources in July saying that China and Australia were approaching an agreement on a framework to meet China's phytosanitary requirements for preventing the spread of blackleg disease. If both sides reach an agreement on the framework, Australian suppliers would send five trial shipments of canola seeds to China, totaling approximately 150,000 to 250,000 tons.

It remains unclear whether COFCO's recent purchase falls under this trial agreement. A trade merchant based in Singapore said, "One batch of cargo has already been finalized, and there are reports that they will purchase more. More deals will be reached soon."

"From the perspective of China's canola seed pressing profit, this price is very cost-effective," added another trade merchant in Singapore. The canola seeds being transported to China come from Australia's new crop, which will be harvested in the coming months. He said, "The cargo will arrive in China around the end of December or early next year."

Bloomberg reported that an anonymous source added that China and Australia have not yet reached an official agreement on phytosanitary issues, and the final details of related transactions are still pending.

An official from the Australian Department of Agriculture also responded, saying, "This is a government-to-government dialogue that is progressing actively, and specific details have not been finalized yet."

Canola fields in Saskatchewan, Canada. IC photo

This year, China has announced a 100% tariff on imported rapeseed oil, meal, and peas from Canada, and a 25% tariff on Canadian seafood and pork. When the State Council Tariff Commission announced the relevant decisions in March, it pointed out that the Canadian government's tax practices on Chinese electric vehicles, steel, and aluminum products seriously violated China's legitimate rights and interests and disrupted Sino-Canadian trade relations.

On August 12, after nearly a year of investigation, the Ministry of Commerce of China issued a notice, determining that imported canola seeds from Canada were dumped, and decided to implement temporary anti-dumping measures in the form of deposits, imposing a 75.8% deposit on all Canadian companies starting from August 14.

Additionally, on the same day, China also announced an anti-dumping investigation into imported pea starch from Canada and determined that imported brominated butyl rubber from Canada was dumped, and imposed corresponding deposits based on the initial determination of each company's deposit rate starting from the 14th.

Chris Davison, chairman of the Canadian Canola Council, stated that this rate "effectively closed the door for Canadian canola seeds to enter the Chinese market."

"These measures show that China is extremely angry with the Canadian government. They suddenly raised tariffs to 100%, which was completely unexpected," added a trader who operates an oilseed processing factory in China.

According to a report by the Canadian Broadcasting Corporation (CBC) on the 18th, farmers in Saskatchewan, Canada's largest canola and pea producing region, have already felt the pressure of a significant market decline. China is the world's largest importer of canola seeds, and over half of Canada's canola seeds are exported to China. Canada's canola exports to China in 2024 were worth nearly 5 billion CAD (approximately 26.05 billion RMB).

Codie Nagy, who grows over 800 acres of canola seeds in the northern part of Osgoode, Saskatchewan, said, "I have been growing canola seeds throughout my career, and I have never encountered such pressure. This is absolutely unprecedented for me."

Nagy mentioned that in recent years, fertilizer costs have doubled, while canola seed prices have only increased by about 20%. In addition, he is facing significant increases in the prices of seeds, machinery, pesticides, and herbicides.

"The cost line and income line are gradually balancing, obviously, you worry about whether you have enough money to maintain operations... "Nagy sighed, "For us, this timing is just terrible."

Regarding China's measures, Canadian Prime Minister Trudeau wrote on social media on August 14, acknowledging that this move will have a "significant impact" on many Canadian farmers. Trudeau said that the Canadian government will push for constructive dialogue with Chinese officials to "resolve our respective trade concerns."

Bloomberg noted that three days after China took action against Canadian canola seeds, on August 15, in response to Canada's steel tariff quota measures and the imposition of discriminatory tariffs on products containing so-called "Chinese steel components," China filed a lawsuit with the World Trade Organization (WTO).

U.S. media said, "The Sino-Canadian trade dispute has further escalated."

The spokesperson for the Chinese Ministry of Commerce on the 15th stated that Canada's disregard for WTO rules, implementation of steel tariff quotas, and imposition of discriminatory tariffs on products containing so-called "Chinese steel components" are typical examples of unilateralism and trade protectionism, which damage China's legitimate rights and interests and disrupt the stability of global steel and other industrial chains and supply chains. China strongly opposes this and firmly objects.

"We urge Canada to take immediate action to correct the wrong approach, safeguard the multilateral trading system based on rules, and promote the continuous improvement of Sino-Canadian trade relations," said the spokesperson for the Ministry of Commerce.

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Original: https://www.toutiao.com/article/7540097205948973602/

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