China seeks to reopen Australia canola trade as Canada ties sour

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China is working to reopen rapeseed trade with Australia after a five-year pause, seeking to secure supplies of a key animal feed ingredient as ties with top supplier Canada sour.

Chinese agriculture trader Cofco actively made inquiries last week with major exporters in Australia on prices and to settle specific terms to book the new rapeseed crop — known locally as canola — that is expected after October, people familiar with the matter said.

The state-owned trading giant has accelerated moves to secure supplies from Australia, the world’s second largest exporter, following Beijing’s decision last week to impose a temporary duty of 75.8% on shipments from Canada following an anti-dumping probe, said the people, who asked not to be named because they’re not authorized to talk to the media.

China has typically relied on Canada for the bulk of its imports of rapeseed and the meal that’s derived from crushing the crop into a product that’s easily fed to livestock and fish. That trade was already under fire when Beijing slapped hefty tariffs earlier this year on cargoes of rapeseed meal in a tit-for-tat response to Canadian duties on Chinese goods.

Cofco Group and its global trading arm Cofco International didn’t immediately reply to emails seeking comment.

While the two countries are yet to reach an official agreement on phytosanitary issues, over which China shut Australian canola out of its market since 2020, Beijing has in principle agreed to get some trial cargoes from Australia, the people said. Still, final details need to be ironed out, they said.

“This is an active and ongoing government to government discussion and details have not yet been finalized,” a spokesperson for the Australian Department of Agriculture said.

Last year, China purchased 6.39 million tons of rapeseed, worth over $3 billion, almost all of it from Canada, according to Chinese customs data.