China AGAIN

[fjlip]

China plans to toughen its standard for imported Canadian canola starting April 1, reducing the amount of foreign material it allows per shipment, an industry group warned Canada's exporters and processors on Tuesday. China's quarantine authority, AQSIQ, notified the Canadian Food Inspection Agency (CFIA) on Tuesday that it will soon allow no more than 1 percent dockage, or the amount of foreign material per canola shipment, Canola Council of Canada President Patti Miller said in an email seen by Reuters. "We will be talking about next steps in escalating the issue politically as well as through government channels," Miller wrote. The current allowable dockage range is 2 percent to 2.5 percent, said a Canadian-based canola exporter, who did not have permission to speak publicly. For-eign material can include seeds of other plants or straw that gets inadvertently mixed with the shipment. CFIA had no immediate comment. Miller and officials at China's consulate in Vancouver could not immediately be reached for comment. The new standard will be difficult and costly for Canadian exporters to meet, said the canola exporter. Some traders may hesitate to ship canola to China for fear of having it rejected or discounted, the exporter added. China has expressed renewed concerns since December about the possible presence of the fungus black-leg in shipments, but exporters suspect China's motivation for slowing imports is linked to its ample domes-tic inventories, the exporter said. Traders and industry analysts in China have anticipated the dockage restriction since earlier this year and they attribute the decision to helping sell down China's large domestic ****seed oil stock-piles, which deteriorate over time. China holds about 5.8 million tonnes of ****seed oil following years of stockpiling. "The restriction is surely to help sales of state reserves. It could hurt ****seed imports," said one trader with an inter-national trading house. Canola, also known as ****seed, is crushed mainly to produce vegetable oil. Chinese buyers have increased imports of Canadian canola for shipment from April to June as crushing margins have improved, said the trader, adding monthly imports may exceed 300,000 tonnes. China's quarantine bureau, the General Administra-tion of Quality Supervision, Inspection and Quarantine, or AQSIQ, had no immediate comment when contacted by Reuters. The Canola Council's Miller said in her letter that AQSIQ has previously said it would honor shipping con-tracts already in place. Rumors about China clamping down contributed to a 2 percent plunge on Tuesday in ICE March canola futures. China was the biggest importer of Canadian canola during the 2014/15 crop year, buying 4.1 million tonnes, according to Statistics Canada data. Canada is the world's biggest canola exporter. Shippers include Cargill Ltd, Archer Daniels Midland Co, Viterra Inc, Louis Dreyfus Corp and Richardson International. Chinese au-thorities notified the Canadian government as far back as 2009 that it would not accept canola with blackleg, but it later agreed to accept it at some of its domestic crushing plants. (REUTERS)

[ajl]

Well this comes as a surprise to no one. China is broke and desperately needs to keep supplies of precious $USD at home to service $USD denominated debt. I hope that western farmers seed so many lentils and peas this spring that it cuts canola acreage significantly. This would happen except that there is a lot of grass breaking in central AB going into production for the very first time this spring. The low dollar and the drought reduced production (in certain area) produced phony price signals to expand production in 16. Hopefully it stays dry somewhere else.

[Braveheart]

Looks like China got the desired result with the drop in canola futures.

There are no easy answers to the inscrutable Chinese. They are shrewd traders. I have a friend who is a freight forwarder, and he will not do business there. Too many payment defaults and cargo rejections.

I wish we only exported canola oil and kept the crushing jobs here.

[binthere]

no poker face is good enough for the china man

[ajl]

Not shrewd traders, they are crooks. Not all, but the ones that have risen through the ranks are.

[wmoebis]

Don't see the big issue. Producers pay cleaning charges to have it cleaned to Comm Clean already. It is in your basis and price.

[Braveheart]

Now what will we do with our extra rye?

[farmaholic]

wmoebis. Doesn't commercially clean allow for 2.5% dockage? Don't know what it can consist of.
There's always and angle.....

We've had some decently clean samples in the past that probably could of had some dockage added. No point in getting it too clean in the combine hopper, end up chucking too much out the back. It always seems too look alot worse than it is through the hopper window.

[wmoebis]

Just me ment farmers pay for it to go over cleaners anyway. So like your conbine just adjust to make it cleaner.

[bucket]

The first question the ag minister should ask is ..." what is china's domestic dockage rate? "

Sure I get dockage is added back in .. that is an easy thing to stop.

Cleaning to 1 percent and shipping? Not as easy.

It's a money play no doubt but I am not sure it should be ignored for very long by either the provincial or federal ag minister.

Maybe the delegation could stop at china on their way back from India.

[BTO_farmalll]

Playing Games 24/7-365

[Braveheart]

Patti Miller is a very capable industry rep. She'll get the right people on it.

[SASKFARMER3]

Crooks or whatever! They don't play fair and life isn't fair so as long as we and the suppliers don't call their bluff it goes on.
I think Egypt is going to find out real quick what happens when the cupboards are empty because you made the rules on wheat stupid!
Starving people have a real desire to live for a while and will fight the ones in power. All governments know this its called a Cheap Food Policy!
Or CFP for short!

[errolanderson]

China is battling excessive supply of all commodities, not just canola. The slowdown in their purchases (IMO) is not a surprise.

With global economies all contracting, commodity prices in-general will remain under pressure as credit markets are also tightening, a sign of further fallout.