Alberta (Rural Roots Canada) – Canadian canola farmers have a little more breathing room after China agreed to extend favourable market access for canola meal through 2028, but industry leaders say the reprieve comes with a reminder not to put all your eggs in one basket.
André Harpe, chair of the Alberta Canola Commission and Canadian Canola Growers Association, says the extension offers something particularly valuable as farmers begin marketing their recently harvested crops: stability.
“If I could boil it down to one word, I would call it stability,” Harpe says. “We were worried about getting our crops off a few weeks ago, but for the most part that’s done. Now, we’re thinking about doing some marketing with it, but it also gets back to realizing that deadline wasn’t too far away. So, we’re very, very pleased.”
The agreement keeps Chinese demand for Canadian canola meal flowing, avoiding the uncertainty that had begun weighing on the market as previous measures approached their expiry date.
While the extension is welcome, it doesn’t resolve the separate tariff situation involving Canadian canola seed.
READ MORE: Canada’s Canola Industry, Pulse Growers Welcome New Trade Deal with China
China continues to impose a six-per-cent tariff on Canadian seed, a cost Harpe estimates can approach $50 a tonne, or roughly $1 a bushel, depending on market prices. That cost is increasingly high as China explores alternative suppliers, including Australia, although Canadian seed continues to move into the market.
Harpe says China remains a critical customer, making continued access essential.
“China is our second biggest market,” he says. “So it gets back to we need that flow to continue whether we like it or not. Also, at the same time, this has given us time, and we can’t waste it”
Still, Harpe says diversification is vital, and Canada needs to continue to explore export markets.
He argues diversification should also include opportunities closer to home.
“Everybody says, you need to look for markets,” says Harpe. “It gets back to, and I haven’t changed this story for a while, but it gets back to we need to start looking right here in Canada, what we can do for using our canola here.”
With new crushing capacity coming online, Canada could eventually process nearly three-quarters of its canola production domestically.
Harpe points to an Imperial Oil refinery project in Alberta that could consume as much as 2.5 million tonnes of canola annually at full capacity.
He says the trade uncertainty of recent years has forced farmers and governments alike to pay closer attention to the importance of developing new markets. And while the China extension buys time, the challenge now is making sure that time is used wisely.
