Canadian canola futures took a beating this morning following discouraging news from China.
Announced early Tuesday, China will implement a new 75.8 per cent tariff on Canadian canola seed imports effective this Thursday. It follows the countries anti-dumping investigation into canola, and they claim to have found evidence that Canada has been hurting China’s domestic market by getting “preferential policies” and getting government subsidies.
The probe began last September and is expected to wrap up next month when a final decision will be made to either keep the tariffs or remove them. Since Canadian canola hasn’t been harvested yet, producers are not going to be feeling the blow until September should China choose to keep the tariffs and extend the probe another six months.
Canola futures were down more than 40 dollars a ton Tuesday morning as a result of the announcement. The new tariffs come on top of 100 per cent levies on Canadian canola oil and meal, and peas, and a 25 per cent tariff on pork and seafood products.
The Wheat Growers Association released a statement in response to the new tariff. President Gunter Jochum called it a blindside hit to farmers who are preparing for harvest and described losing the biggest market for our canola in China as “pulling the rug out from under us when we’re already running full tilt.” The Wheat Growers added this follows a pattern from the federal government of farmers being collateral damage in Ottawa’s trade fights.
They call on the federal government to engage with China to roll back or suspend the tariffs, commit to diversifying export markets to reduce dependency on single-country buyers, and to establish an agricultural trade envoy to prevent farm products from being targeted in political disputes.
Chief Agricultural Editor of SaskAgToday.com Kevin Hursh says this is what has been feared for quite some time, and this is the worst possible news that Canada could have gotten on that front. From a political standpoint, Hursh feels the federal government dropped the ball for the agriculture sector.
“It is interesting to note that the Canadian government has provided assistance to the lumber industry because of a U.S. tariff on Canadian lumber, softwood lumber, but this action by the Chinese, both on oil and now on canola seed is directly a result of the Canadian tariff on Chinese EVs. That was something that we caused, and yet nobody is saying ‘we’re gong to compensate Canadian grain farmers because of this’.”
(With files from Ryan Young/CKRM)
