Import rules to toughen in China

China may suffer a shortage of canola meal, a protein-rich feed ingredient, after Beijing plans to toughen the import standards for the oilseed from major exporters, industry analysts said.
China will allow no more than one percent of foreign material in canola shipments starting April 1, the country’s quarantine agency said last month. The higher standard may be costly for Canadian exporters, resulting in the country taking a more cautious approach to selling canola to China.
The rule also affects Australian canola, but Canada is by far China’s largest supplier of the oilseed, known also as rapeseed. Industry participants have speculated that the higher standard is part of a plan to reduce China’s large canola oil stockpiles by reducing seed imports rather than because of concerns about the transmission of the blackleg fungus.
Expectations of low canola oilseed imports coupled with a big drop in the domestic harvest means China may have to increase imports of canola meal this year to meet the needs of the fish-farming sector, the analyst said.
“There will be a shortage of canola meal at home. Feed mills may have to increase imports whenever prices are favourable,” said an industry analyst.
Chinese feed mills consume about 11 million tonnes of canola meal a year and soymeal has already replaced the use of canola meal to a large extent since 2015. The replacement would continue this year and that would cap the growth of imports, the analysts said. But for fish farming, canola meal cannot be replaced fully, he added.
“But imports would not return to the 2011 level, though there could be a short-term spike during the peak consuming season” from May to August, said Xu Aixia, an analyst with Everbright Futures Co. Ltd.
China imported a record 1.38 million tonnes of canola meal in 2011 after Beijing limited canola imports from Canada due to fungal disease in 2009.
Beijing has been selling its sizable state rapeseed oil reserves, equivalent to about one year of consumption.
China was the biggest importer of Canadian canola during the 2014/15 crop year, buying 4.1 million tonnes, according to Statistics Canada data.
Source: Reuters