Canada’s canola farmers are bracing themselves for the potential impact of China’s new anti-dumping investigation into Canadian canola imports. A recent report from an international credit rating agency suggests that this move could result in a “billion-dollar hit” for the country and its supply chain.
Morningstar DBRS released a report on Thursday stating that the investigation into canola seed imports by China could lead to the imposition of levies on the crop. This would have a significant impact on global canola trade flows and Canada’s grain handlers.
The announcement of the investigation came after Ottawa imposed tariffs on Chinese electric vehicles (EVs), following similar actions by the U.S. and the European Union. Farmer John McKee mentioned that the market price for canola in southern Alberta dropped by nearly a dollar following the announcement.
Ian Boxall, president of the Agricultural Producers of Saskatchewan, expressed concerns about the impact on farmers, stating that canola is a highly demanded crop worldwide. He emphasized that while consumers may not see a reduction in prices, farmers will feel the financial hit.
In 2023, Canada exported close to $5 billion worth of canola products to China. The credit rating agency highlighted that the potential impact of tariffs on the economy could be significant, similar to a trade action taken by China in 2019.
While there are concerns about the ongoing investigation, the report suggests that solutions can be found. During a previous standoff in 2019, when China blocked canola shipments from Canada, other parts of the world, particularly Europe, stepped in to import canola.
Industry officials have stated their support for the investigation by China and are closely monitoring the developments. Agriculture Minister Lawrence MacAulay expressed his concerns about China’s actions and is working with government and industry colleagues to monitor the situation.
This content was originally published by Global News, a division of Corus Entertainment Inc.
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