In retaliation for Canada slapping a 100-per-cent surtax on Chinese-made electric vehicles, Beijing this week alleged Canadian producers are dumping canola – or selling at cut-rate prices – in China’s market.Jeff McIntosh/The Canadian Press
For Saskatchewan canola farmer Dean Roberts, the news that China has accused Canada of unfair trade in the valuable oilseed has come at a terrible time.
It’s harvest season and his energy is entirely focused on collecting crops and getting them to market.
“It adds extra stress to this time of year and it’s not good for farmers or our mental health,” Mr. Roberts, 38, says of accusations from China.
He farms a number of different crops 30 kilometres from the town of Kindersley in west-central Saskatchewan. By early September, the brilliant yellow flowers topping canola plants have disappeared. In their place are pods containing tiny black seeds, waiting to be harvested.
In retaliation for Canada slapping a 100-per-cent surtax on Chinese-made electric vehicles, Beijing this week alleged Canadian producers are dumping canola – or selling at cut-rate prices – in China’s market.
China has opened an anti-dumping investigation into what it called “unfair competition of the Canadian side” and alleged losses its own canola producers are suffering.
Such a probe is likely a prelude to anti-dumping action by Beijing, such as retaliatory tariffs on Canadian canola imports.
Mr. Roberts said he’s unfamiliar with the term or the details of China’s allegations. “I hadn’t heard of ‘anti-dumping’ prior to yesterday morning,” he said about the Tuesday announcement. “I deliver my grain to the local grain elevator. They ship it to the world. We’ve had a long-standing trade relationship with China.”
Punitive actions by China are still fresh in the minds of Canada’s 40,000 canola producers.
In 2019, China temporarily blocked Canadian imports of canola by two large exporters in retaliation for Ottawa arresting a Chinese tech executive, Huawei’s Meng Wanzhou, on an extradition request from the United States. The Canola Council of Canada has said expert analysis estimates this cost Canadian producers between $1.54-billion and $2.35-billion in lost sales and lower prices between March, 2019, and August, 2020.
China makes up more than half of Canada’s export market for canola seed and is the second-biggest foreign customer for Canadian canola products (including seed, oil and meal) after the U.S.
Retaliatory action from China is now “just one more thing to worry about” as Mr. Roberts concentrates on bringing in his crops.
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The Saskatchewan farmer said there’s been non-stop upheaval in grain markets over the past five years, including the COVID-19 pandemic, a drought and Russia’s war on Ukraine.
News of potential retaliation also comes as Mr. Roberts and other farmers make crop decisions for next year, such as what to plant.
“This starts to impact decisions for next year,” he said. “So right now, I’m starting to make decisions to plant the 2025 crop. And when there’s uncertainty in the market like this, I may not make a good decision, because this, this could change direction before I get my next crop to harvest.”
For instance, Mr. Roberts said, if he cuts back on producing canola, “and then the market comes back, and we don’t have the production, that’s just going to drive more market swing, because the supply gets a little bit less predictable.”
Chuck Penner, an analyst with LeftField Commodity Research in Winnipeg, said canola prices have dropped more than half from a historically strong peak of $1,200 a tonne in early 2022. There were signs prices were heading upward again before the news from China this week, he said.
Mr. Penner said a recent example of China’s anti-dumping action against another country is the 80.5-per-cent tariff it slapped on Australian barley about four years ago. Beijing announced the tariffs in 2020 as ties frayed over Australia’s then-prime minister Scott Morrison calling for an independent international investigation into the origins and handling of COVID-19, which was first detected in China. The tariffs lasted three years and effectively ended Australian barley trade with China during that period.
Mr. Penner said China’s Tuesday statement on Canadian canola and how shipments had risen 170 per cent year-over-year was misleading because this increase reflects a revival of exports after Beijing removed the restrictions on the two major Canadian exporters in 2022, and it follows a 2021 drought that limited production.
He said Canada could compensate for a loss of opportunity in China by selling more to other major buyers in locations such as Japan, Mexico or Europe, but it will likely be forced to lower prices to boost market share there.
Mr. Penner said the change in volume of shipments to China is not evidence of dumping and he noted that government subsidies for Canada’s canola industry are minimal. “If you are politically determined to come up with a predetermined ruling, I guess the evidence doesn’t really matter though,” he said.