Canada’s Canola Inventory Hits Four-Year High

Canadian canola producers are stockpiling their crop, hoping for improved pricing opportunities later this year or in the spring.  China’s anti-dumping investigation into canola seed imports is having a direct impact on farmer’s plans to ship their current inventory.  Agriculture Canada, with data from Statistics Canada, says current on-farm storage for canola is at its highest levels since 2020.  Two years later, in mid-2022, canola reached its market peak.  But since then, canola markets have softened - and now, a sharp decline last month, immediately following China’s announced anti-dumping probe.

So, the canola crop is piling up in Canada after China launched its investigation in early September. That investigation is in retaliation for a 100% tariff against any imports of Chinese electric vehicles or parts into Canada, along with a 25% surtax on Chinese steel and aluminum, jointly announced by Ottawa in August.

David Marit, Saskatchewan’s Minister of Agriculture, said that, once again, Canada’s agricultural industry is feeling like collateral damage in an un-related dispute.

"It’s unfortunate that we’re caught in that," Marit noted.  "We saw this a few years ago when they banned a couple of companies from moving Canola into China. Just the announcement of the investigation, we’re just kind of stuck in it. It always seems to be when somebody takes an action, there’s a reaction. But we’re hopeful that the investigation will prove that we’re doing the right thing. And, hopefully, we can resolve this issue before it does develop into some real trade challenges.”

The Canadian government has joined the U.S. government to block sales of highly subsidized, cheap electric vehicles into North America.  Governments and industry see this as an attempt by China to cripple the fledgling domestic industry.  Ottawa’s announcement explained that Canada is moving in lockstep with the U.S. so that Canada could not be used as a back-door entry by China to move their EVs into the American marketplace.

Marit says that making canola trading practices suspect puts a negative focus on canola products and pricing; not only for Saskatchewan producers but for several Canadian provinces and their canola producers.

“Just the announcement of launching the investigation impacts not only Saskatchewan but a lot of provinces in Canada. Alberta, Saskatchewan, Manitoba, and even Ontario. China is a big partner for Saskatchewan products. Canola leads the way, but also potash and peas as well. So, hopefully, the federal government and China can come to resolve this, and we can see the flow of canola moving into China’s markets again.”

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