Canola Council of Canada working “very diligently” to resolve China trade dispute

The CCC’s VP of Public Affairs, Brian Innes, said China suspended the two companies because of contamination in Canadian shipments.

“The Canadian Food Inspection Agency has had discussions with the Chinese government regulator and disagrees with that assessment,” Innes said.

“Right now, we’re having discussions between governments of Canada and China to really get to the bottom of why there’s this difference of opinion on the quality of our canola shipments.”

The CCC includes the whole canola value chain, from producers, seed developers, processors and exporters. Innes said the conflict has created a chain of uncertainty for everyone within that chain.

“Producers see it because it’s affecting the price they get for their canola and it’s impacting the amount of product that we’re exporting, which impacts the ability of growers to sell on to the spot market and deliver when they want to now before spring seeding,” he explained.

“(The issue) impacts not just those who are involved with canola but those in the community (as well), because canola growers and the whole value chain spans across Western Canada, including in Lethbridge where there is a major seed development presence.”

Innes was referring to Richardson Oilseed Lethbridge, a facility operated by Richardson International.

LOCAL IMPACT

Innes echoed the abundance of uncertainty within the industry. He said the concerns heard from producers in Lethbridge are like those they’ve heard from producers across all of Canada.

“There’s a lot of things that farmers don’t control. They’re getting out in the fields in Lethbridge as we speak and they’re concerned about having too much water, not enough water, concerned about having too much heat or not enough heat, concerned about having a late frost or an early frost,” he said.

“There’s a lot of things that producers already have to manage.”

He said the CCC’s job is to work on trade issues to try to minimize the risks that arise from trade. He noted that they’ve faced challenges with China in the past, and they’re working hard to resolve this one.

“In a city like Lethbridge, you’ve got a lot of canola producers around the city but there’s a lot of other folks who work in the industry who may not be quite as visible,” _{-Canola Council of Canada’s Brian Innes}

“The centre of our seed production for Canada is right in Lethbridge, so we have our major seed companies who do the breeding and the production of the seed the farmers plant and that’s all happening right in Lethbridge. You’ve got a canola processing plant that turns the canola seed into oil and meal for livestock and then you also have a plant in Lethbridge that turns canola into further processed products, whether that’s bottled oil or margarines or shortening to be used throughout the industry and people’s cupboards.”

He noted that people usually put the focus on the yellow fields of farmers that plant the seeds, but it’s important to remember industry workers that are employed right in the heart of the city of Lethbridge.

ECONOMIC IMPACTS

As far as any economic issues this has caused, Innes said it’s had an impact on canola prices.

He added that as far as the CCC understands, all contracts that growers have with exporters will be honoured, but this conflict “is affecting future sales”.

“What we know is that when farmers have less and the industry has less then they have less to spend in the economy, so we’ve seen for example about a ten per cent drop in prices of canola over the last couple of weeks, and that’s essentially taking away the profit margin that producers have. So, that’s a concern for the long term and that’s why we work to have access to as many markets as possible, so growers can bring the most value from export markets back here to Canada,” Innes said.

TIMELINE ON RESOLUTION UNKNOWN

Innes noted that every day that goes by creates more of an impact on Canada and he doesn’t expect the issue to be “resolved immediately”.

However, he added that the demand in China for Canada’s “high quality oil” and protein that comes from the country’s canola is high. Last year, they saw record exports of canola seed, oil and meal.

“Some of the canola seed that’s processed right there in Lethbridge at the Richardson Oilseed plant would make its way to China, whether it’s as oil or meal or the seed that would go directly from the (grain) elevators around the country,” he said.

“It will take some time to sort things out but we’re confident that the demand is still strong, and we’d like to get the issue around seeds and our exports to China resolved as quickly as we can.”

He said the CCC is working “very diligently” with the Canadian government to move a resolution forward as soon as possible.

“We’ve dealt with issues at the Canola Council around access to markets for many years. So, in this type of issue, there’s a number of things that we can do to help solve the issue and that’s why we’re focusing right now on making sure that we get a scientific discussion on why there’s this difference of opinion between Canada and China,” he said.

“If the scientific discussions appear to not be moving forward, then we need to look into our toolbox and help to elevate the issue and do what’s necessary to resume our canola seed trade.”

by Justin Goulet

Canola Council of Canada working “very diligently” to resolve China trade dispute

What's Happening