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Importers may avoid more Canadian farm products amid tensions
By Shen Weiduo and Wang Cong Source:Global Times Published: 2019/4/9
A grain truck unloads spring wheat in Manitoba, Canada in August 2018. Photo: VCG
Chinese importers might cancel plans to purchase more agricultural products from Canada, including wheat, peas and flaxseed, as they become increasingly concerned about getting tangled in a diplomatic spat between China and Canada over the latter's arrest of a Chinese technology executive.
Citing executives of several Chinese companies, the Canada-based Global and Mail newspaper reported that Chinese agricultural importers have become more cautious about importing agricultural products from Canada and in some cases already canceled purchase plans.
For instance, Jiangsu Tongliang International canceled purchase plans for wheat, peas, flaxseed and rapeseed meal, the company's chief executive Gao Huazhi told the Global and Mail.
A representative of the company said she was not aware of the situation, when asked by the Global Times on Tuesday.
Jiao Shanwei, editor-in-chief of cngrain.com, a website specialized in grain news, said that it's possible that domestic import agencies would avoid purchasing more agricultural products including canola from Canada to avoid risks as the bilateral relationship continues deteriorating.
Tensions between China and Canada have persisted in recent weeks after Canadian authorities decided to start extradition proceedings against Meng Wanzhou, CFO of Huawei, despite repeated protests and criticism from China. Meng was arrested by the Canadian authorities last year at the behest of the US.
As tensions have risen, the trade relationship has worsened. Citing non-compliance with China's health requirements, Chinese authorities have suspended export licenses for two major Canadian exporters of canola seed, Canada's largest agricultural export to China.
"China also imports peas, flaxseed and wheat from the country," Jiao told the Global Times on Tuesday, hinting that Chinese companies could also halt imports of these products from Canada to avoid potential risks.
He said wheat, like canola, is another main farm import from Canada. Canadian wheat exports to China jumped nearly 200 percent year-on-year to 1.3 million tons between January and November 2018, according to Canada's Financial Post.
But "with trade negotiations between China and the US going well recently, it's possible that China will go back to the US for agricultural products as well," Jiao added.
After nine rounds of high-level negotiations, Chinese and US officials have signaled that they might be close to a trade deal that will end their tariff war. China increasing purchases of US farm products is said to be a huge part of the deal.
Industry analysts said that as China has been pushing forward the Belt and Road Initiative (BRI), importers might turn to countries and regions along the routes of the BRI and those around the Black Sea, including Russia and Ukraine.
China also became the top buyer of Canadian yellow peas after India slapped tariffs on the product. In 2018, China imported as much as 1.4 million metric tons of the crop, up 84 percent year-on-year, according to Bloomberg.
But after news broke of Chinese importers canceling purchases of Canadian peas, the commodity's price dropped 7 percent in March, Bloomberg reported.
By Shen Weiduo and Wang Cong Source:Global Times Published: 2019/4/9
A grain truck unloads spring wheat in Manitoba, Canada in August 2018. Photo: VCG
Chinese importers might cancel plans to purchase more agricultural products from Canada, including wheat, peas and flaxseed, as they become increasingly concerned about getting tangled in a diplomatic spat between China and Canada over the latter's arrest of a Chinese technology executive.
Citing executives of several Chinese companies, the Canada-based Global and Mail newspaper reported that Chinese agricultural importers have become more cautious about importing agricultural products from Canada and in some cases already canceled purchase plans.
For instance, Jiangsu Tongliang International canceled purchase plans for wheat, peas, flaxseed and rapeseed meal, the company's chief executive Gao Huazhi told the Global and Mail.
A representative of the company said she was not aware of the situation, when asked by the Global Times on Tuesday.
Jiao Shanwei, editor-in-chief of cngrain.com, a website specialized in grain news, said that it's possible that domestic import agencies would avoid purchasing more agricultural products including canola from Canada to avoid risks as the bilateral relationship continues deteriorating.
Tensions between China and Canada have persisted in recent weeks after Canadian authorities decided to start extradition proceedings against Meng Wanzhou, CFO of Huawei, despite repeated protests and criticism from China. Meng was arrested by the Canadian authorities last year at the behest of the US.
As tensions have risen, the trade relationship has worsened. Citing non-compliance with China's health requirements, Chinese authorities have suspended export licenses for two major Canadian exporters of canola seed, Canada's largest agricultural export to China.
"China also imports peas, flaxseed and wheat from the country," Jiao told the Global Times on Tuesday, hinting that Chinese companies could also halt imports of these products from Canada to avoid potential risks.
He said wheat, like canola, is another main farm import from Canada. Canadian wheat exports to China jumped nearly 200 percent year-on-year to 1.3 million tons between January and November 2018, according to Canada's Financial Post.
But "with trade negotiations between China and the US going well recently, it's possible that China will go back to the US for agricultural products as well," Jiao added.
After nine rounds of high-level negotiations, Chinese and US officials have signaled that they might be close to a trade deal that will end their tariff war. China increasing purchases of US farm products is said to be a huge part of the deal.
Industry analysts said that as China has been pushing forward the Belt and Road Initiative (BRI), importers might turn to countries and regions along the routes of the BRI and those around the Black Sea, including Russia and Ukraine.
China also became the top buyer of Canadian yellow peas after India slapped tariffs on the product. In 2018, China imported as much as 1.4 million metric tons of the crop, up 84 percent year-on-year, according to Bloomberg.
But after news broke of Chinese importers canceling purchases of Canadian peas, the commodity's price dropped 7 percent in March, Bloomberg reported.
