Canada can easily meet China's demand for clean canola: analyst
China wants Canadian canola shipments to have less non-canola material in it, a requirement a commodities analyst says producers here can meet.
Canada relies heavily on its trade relationship with China. The Chinese government is strong-arming Canadian canola producers into tightening up the amount of dockage.
That's the stuff other than canola seed — including weed seeds, weed stems, chaff, straw, or other types of grain — in each tonne shipped to China.
Right now the Canadian standard has a 2.5 per cent dockage regulation meaning for every tonne of canola shipped, farmers can have 2.5 per cent of that tonne as extra material that's not canola seeds.
China wants Canadian canola to come down to one per cent dockage and had set a deadline for Sept. 1 for Canada to meet these demands.
There appears now to be a little more breathing room for Canadian farmers. Prime Minister Justin Trudeau, who's in China, announced Wednesday that China has agreed to extend the Sept. 1 deadline.
China hasn't abandoned its one per cent requirement, however.
While critics have come out saying this change in regulation will end up causing a backlog in cleaning seeds and clog up the system, a commodity expert said Canadian farmers and grain companies already come very close to meeting China's standards.
"We can clean wheat dockage back to 0.5 per cent. Why can't we clean canola to one per cent?" asked Larry Weber, who's with Weber Commodities Ltd.
"If we can export 18 million tonnes of wheat with 0.5 per cent dockage, why can't we ship four million tonnes to the Chinese with one per cent?"
Weber added 2.5 per cent dockage on any export product is too much and he said the Chinese have a point here.
Statistics Canada said Canadian farmers anticipate producing 17 million tonnes of canola this year. That is down about one per cent from last year, but producers are said to be on track for the second- or third-biggest harvest on record.
Stakes high for canola farmers
Despite Weber's belief that this new regulation shouldn't hinder any production or exports, a professor of food distribution at Dalhousie University said the stakes are high for farmers who grow canola and rely on shipments to China because China represents 40 per cent of Canada's canola export market.
Sylvain Charlebois said at the heart of China's request is food security and the cleaner the exports the less chance of disease contaminating its crop, specifically blackleg, a deadly fungus known to kill livestock and found worldwide.
"Over the last few years China has had major biosecurity and food safety crisis and so anything that has to do with things like blackleg they react," Charlebois said. "We rely on China too much as a market for us and China knows it, that's the problem, and that's why they're trying to make a point here."
But if Canada cannot meet China's demands and China shuts its doors, it could be time for Canada to start exploring other customers like Latin America, Europe and the Middle East.
According to Charlebois, this agreement with China could mean farmers in Canada start to think about growing other crops besides canola.
"There's a big number of farmers committed to canola right now," he said. "Farmers will look at what's happening right now with China and some may go and grow another crop."
