Canola shipment to China knocked back

THE CANOLA industry is the latest agricultural victim of ongoing trade tensions between Australia and China.

Multiple sources have confirmed a shipment of Australian canola from Geraldton was refused at a Chinese port late last year due to the presence of blackleg along with foreign material above thresholds.

In making this decision China enforced the official zero tolerance standard for blackleg that has always remained the official position, in spite of a memorandum of understanding (MOU) signed in 2013 that allowed more flexibility in regards to blackleg.

The MOU ended a three and a half year Chinese ban on imports of Australian canola, enforced due to issues with the presence of blackleg in shipments, by the creation of a joint research program, which allowed a loophole where ‘experimental ‘ shipments of canola for processing could be exported from designated Australian ports.

The shipments were to come from regions where the risk of blackleg was lower but allowed for trace readings of the damaging fungal disease.

However, this interpretation has been tossed out when assessing the recent shipment.

Australian Oilseeds Federation (AOF) executive officer Nick Goddard said China was within its rights to knock the shipments back if there was blackleg present.

“Although we have been working within the framework of the MOU, the zero tolerance ruling remains the official standard,” Mr Goddard said.

“We’ve exported over a million tonnes of canola to China since the MOU was signed as ‘experimental’ shipments so we have certainly got value out of the deal,” he said.

There is not believed to be any canola on the water on its way to China while trade sources, that declined to be named because of the delicate nature of trade with China, said the industry was looking at alternative markets in spite of the premium China is paying for the oilseed.

Mr Goddard said he felt traders would take a safety-first approach to selling to China.

“I think anyone who is marketing canola would understand there is a big risk at present with China,” he said.

“There are other markets out there buying at good prices so I think that is where the trade will be looking.”

The European Union (EU) is the largest export market for the Australian canola industry, with China accounting for a small, but significant amount of sales.

Along with Australian reticence to sell to China there have been international market reports that have said Chinese traders are washing out purchases of Australian canola, in spite of a shortage of alternative options.

Andrew Weidemann, Grain Producers Australia (GPA) chairman said he did not think the Chinese developments would influence growers’ planting intentions for this year’s crop.

“China is only one of our markets, the EU is the big one and then there is very strong domestic demand as well, so I don’t think things would collapse if we weren’t selling to China,” Mr Weidemann said.

“That said, it is concerning and we are hoping the relevant parties can work through it all.”

It is believed the shipment from Geraldton was between 30,000 and 40,000 tonnes.

The Federal Department of Agriculture has been contacted for comment.

Queensland Country Life

Tags: Australia, China, export, canola, AOF