Some interesting debate is circulating on the China trade front as the country’s Nov 15 deadline looms where all shipments must be accompanied by a certificate stating absolute zero blackleg tolerance. Given the widespread nature of the disease, it is impossible for any supplier to attach such a guarantee.
As it stands today, the Chinese government is maintaining a hard-line position on this issue, which would mean no further canola sales will be made to China from Canada after Nov 15 - a country which last year represented a third of all Canadian exports.
Rumors circulating the export sector suggest all kinds of reasoning behind the sudden ‘hard to get’ nature of Chinese business; from legitimate Chinese concerns on blackleg to the Chinese playing a game to knock down canola prices, and a back door rationale to reduce built up Chinese canola/rapeseed stocks by restricting more attractively priced imports.
Whatever the reasons there is certainly a sense of underhandedness in the Chinese position and one has to question China's willingness to uphold the rule of law and contract in their dealings. Unfortunately, they are such a large global player, they cannot be ignored - and they know it.
The trade thinking is that a resolution could coincide with a scheduled visit to China on December 2-6. In the meantime, even if that emerges as the common view, the grain trade will likely gear up for a month waiting and/or defer shipment. It is highly unlikely in this waiting period that any more fresh business to China gets done until the green light is again lit.
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