Reuters — The Canadian government confirmed Wednesday that China has toughened its standard for canola shipments, an action that traders say may discourage sales to the country.
China, Canada’s top canola export market, notified Ottawa on Tuesday of the new measures, Canadian Food Inspection Agency (CFIA) spokeswoman Tammy Jarbeau said in an email statement.
Reuters reported exclusively on Tuesday that China’s quarantine authority, AQSIQ, told CFIA it would allow no more than one per cent foreign material — called dockage — in Canadian canola shipments as of April 1.
The current allowable dockage range is two per cent to 2.5 per cent. Foreign material can include seeds of other plants or straw.
Exporters say the new standard will be difficult to achieve.
China’s canola imports from Canada tend to slow toward the end of the crop marketing year anyway, said Errol Anderson, a crop analyst at ProMarket in Calgary.
Even so, canola futures look to trade weaker in the near term, he said.
ICE Futures Canada canola futures partly recovered on Wednesday after tumbling to a nearly 10-month low in the previous session.
The Canadian government will work with China and canola exporters on standards that are “commercially viable,” CFIA’s Jarbeau said.
Canada is the world’s biggest canola exporter. Shippers include Cargill, Archer Daniels Midland, Viterra, Glencore and Richardson International.
— Reporting for Reuters by Rod Nickel in Winnipeg.