Market Morsel: Canadian Canola to be hit by China?

Market Morsel

It seems that the Canadian canola market may get to experience what the Australian barley industry went through.

Canada recently introduced a tariff (100%) on Chinese electric vehicles and steel/aluminium (25%). China has responded by launching an anti-dumping investigation into Canola imports from Canada.

This will sound very familiar to Australian barley producers, as this is what occurred in 2020. The accusation is that Canada has increased its exports and is suspected of dumping.

Canadian exports to China were robust in 2023, although not as strong as in 2017 and 2018. This can be seen in the first chart below.

The second chart shows the percentage of overall exports from Canada destined to China over the past ten years.

In the majority of years, China has been less than 50% of Canadian exports. This is less reliance than Australia typically has with our canola trade to Europe.

So what does this mean? 

We can look to the barley tariff as a guide. China still wanted to buy barley, but they ended up purchasing from other origins. If China introduces tariffs, then Chinese imports may look to alternate origins for canola, and Australia is top of that list.

This will make us a lot more attractive, and Europe, with its desire for non-GM canola, may have to pay up to gain access to Australian supplies if China continues buying.