The dry bulk sector is expected to emerge largely unscathed from China’s recent ban on imports of canola from Canada, say industry observers.
China’s foreign ministry recently announced it would block imports from Richardson International – one of Canada’s largest grain producers – due to fears of “insect infestation”.
However, some have suggested that the block may be the latest swipe against the Canadian government for arresting a top Chinese tech executive.
Canada exported 10.7mt of canola seeds in the last calendar year, of which over 40% was shipped to China, according to the Canola Council of Canada.
“Canada is the world’s second largest producer of canola after the European Union (EU), and by far the largest exporter of canola seeds accounting for at least three quarters of global canola seed exports,” Ralph Leszczynski, Banchero Costa’s head of research in Singapore, tells TradeWinds.
“The EU is the largest producer but it consumes even more and is a net importer. So it seems there are very few real alternatives for China to substitute Canadian canola.”
Leszczynski says he finds it really curious that China’s clampdown on canola, which is crashed to make oil, comes at the same time when China is already hitting on another oilseed – soybeans – as they could be seen as alternatives to each other.
“Shipping-wise, in the global scale of things, the 4.2mt of canola seeds China imported from Canada in small stuff, in comparison for example with the 18-20mt per year of soybeans that China imports every year from the US,” said Leszczynski.
“I think these days the attention of the shipping world is firmly focused on what is happening with Vale in Brazil and with the trade spat between the US and China.
“Further confusion and disruption on the China-Canada front is obviously unhelpful, but remains just a side show.”
