UPDATE 1-Canadian canola exporters book China sales, roil trade dispute

Fri Aug 26, 2016 12:08pm EDT
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(Adds comment from Canadian, Chinese officials, industry)

By Rod Nickel

WINNIPEG, Manitoba Aug 26 (Reuters) - Canadian exporters are making small sales of canola to China under Beijing's stricter terms, an industry group and three sources said, possibly undermining Ottawa's hardline negotiating stance with the world's top market for the oilseed.

The dispute over the new shipping standard, which industry groups in the world's biggest canola exporter warn would cripple C$2 billion ($1.55 billion) in trade, threatens to mar Canadian Prime Minister Justin Trudeau's visit to China next week. The tougher standard on canola, also called rapeseed, takes effect on Sept. 1.

Canada's trade minister told Reuters this week that the trade relationship could not progress until the issue is resolved, prompting Beijing to criticize Ottawa for linking the two matters.

Trudeau will raise the issue with Chinese leaders next week, a senior Canadian official said.

The sales of the oilseed, which is crushed to produce vegetable oil and animal feed, risk weakening Canada's negotiating stance with China, since they show trade continues.

While Canadian industry groups say the standard would be expensive to meet, China wants the tougher rule on foreign material in shipments to protect against crop disease.

Cargill Ltd, Louis Dreyfus Corp and Parrish & Heimbecker have made sales ranging from about 30,000 to 60,000 tonnes to China for delivery after Sept. 1, according to trade sources who were not authorized to speak publicly.   Continued...