China: wild card in the canola market.

With more than a billion increasingly prosperous mouths to feed, China has become a major influence in agricultural trade. But when it comes to canola, it has been an unpredictable buyer. “China is a bit of a wild card,” says Catherine Folkersen, executive director of SaskCanola.

Dave Hickling, the Canola Council of Canada’s vice president of utilization, agrees. “Historically, China has been a somewhat inconsistent market,” he says. “However, it was very important for us this past crop year.” In 2008-09 China imported almost 2.9 million tonnes of Canadian canola — a record. “Even though we had a bumper crop last year, (sales to) China took some of the pressure off,” adds Folkersen.

Some of China’s unpredictability revolves around import duties. “Part of the issue is tariffs,” says Hickling. China imposes a nine per cent import duty on canola, considerably more than the three per cent levied on soybeans.

Rapeseed is grown extensively in that country, but not the double-zero canola. And although Chinese officials have publicly stated they have a goal to switch production to canola, so far it hasn’t happened.

Making a distinction between canola and rapeseed in China is problematic. The country’s handling system currently doesn’t allow for differentiation. That poses problems for animal feed processors, who sometimes can’t be sure whether they’re getting canola meal or rapeseed meal. And that has also prevented the health benefits — which made canola the darling of the edible oils market in Canada — from having the same impact on Chinese consumers.

So, what kind of interest can canola marketers expect to see from China this crop year? “It’s hard to know,” says Hickling. The country had been building up reserves of canola, along with other oilseeds. But it’s unclear if that will continue.

Regardless, export movement to China this year will decline. “It will be lower, but just how much lower, we don’t know yet,” says Hickling. “We just don’t have the supply.”

Long term, China will likely continue to be interested in Canadian canola. A growing population and dwindling access to agricultural land means it’s falling behind in crop production. “The country is moving away from self-sufficiency,” says Hickling. “It just doesn’t have the land.”