China has announced preliminary customs duties of 75.8 % on imports from Canadian canola, causing an immediate shock wave in the agricultural sector in Western Canada and threatening a $ 5 billion export market.
This measure, which will be in force as of Thursday, is part of a broader trade conflict, triggered after Canada imposed customs duties on Chinese electric vehicles in August 2024. China had already established 100 % customs tariffs on the Take and Canola oil from Canada in March 2024.
The economic impact could be considerable. The fall in canola prices was not long in coming and analysts provide for a total potential decrease of $ 150 per tonne.
China, which usually buys 5 million tonnes of Canadian canola per year, represents 25 % of Canadian exports in this culture.
Canola Canadian Industry is a very important contributor to the Canadian economy, with an estimated contribution to nearly $ 44 billion per year, representing more than 200,000 jobs and more than $ 16 billion in wages.
Saskatchewan, which produces 55 % of the Canadian canola, will be particularly affected. Farmers are facing major storage and cash challenges.
The producer of Canola Martin Prince claims that farmers feel neglected, because no communication has been made regarding aid for pea and canola producers to mitigate the situation.
Photo : Radio-Canada / Arzouma Kompaore
We are going to be patient, we will see how the market will react
declares Martin Prince, producer of Canola in Saskatchewan, evoking an immediate financial impact: It is a direct reduction in our beneficiary margin
.
In addition, producers feel trapped in a trade war that they have not started, says Bill Prybylski, president of the Saskatchewan Association of Agricultural producers.
We are very disappointed and worried.
According to Bill Prybylski, the president of the Saskatchewan agricultural producers’ association, farmers need immediate solutions for upcoming harvest.
Photo : Radio-Canada / Arzouma Kompaore
The consequences could be felt far beyond the agricultural sector. Jerry Klassen, analyst, explains: Transforming 5 million tonnes requires nonexistent infrastructure elsewhere
.
Another threat lies in the fact that this situation leads to increased risks of storage problems, because canola is a “fragile” product which presents a risk of deterioration or loss in storage, adds Bill Prybylski.
If producers fail to sell their products, this will have a significant impact on their cash flow and the financial situation of most farms
he specifies.
According to experts, if producers receive less for their canola, they will have less money to spend on equipment, agricultural inputs, or new infrastructure. This will have a negative training effect on the whole economy. (Archives photo)
Photo : Radio-Canada / Genevieve Laurent
Experts, including analyst Jerry Klassen, recommend immediate diplomatic action. They suggest the urgent sending of a high -level Canadian delegation to China for negotiations, before the situation deteriorates more.
The Canola Canadian Council has asked the federal government to intensify its commitment to China. Chris Davison believes that there remains a lot to do and asks the Canadian government to redouble their efforts to solve these commercial problems. He insists that the situation is a political question that requires a political solution
.
Our industry has worked for many years with Chinese industry to build the relationship and establish and develop canola trade between the two countries.
Experts believe that if the problem persists and that China changes its commercial policy permanently, producers should change their culture systems and reduce Canola production. However, this could have the effect of devaluing the price of other cultures if there is a surplus of production in these markets.