November 2, 2009 / 4:18 PM / 8 years ago

China refuses Canada canola extension request

4 Min Read

WINNIPEG, Manitoba (Reuters) - China, Canada's top export market for canola seed last year, has refused a Canadian delegation's request to delay for six months a plan to reject Canadian canola with blackleg disease as of November 15, the Canola Council of Canada said on Monday.

China has also not shown any willingness to consider alternative steps to reduce the risk of importing Canadian canola with blackleg disease, such as transferring canola from vessels directly into crushing plant silos. Such a move would essentially segregate Canadian canola from China's rapeseed, the council said.

"It's not a position that's acceptable to Canada's canola industry," said Canola Council spokeswoman Debbie Belanger, adding that Canada has shipped about 10 million tonnes of canola to China in the past 10 years without any reports of blackleg disease being transferred from the Canadian seed to Chinese rapeseed crop.

Blackleg, a disease caused by a fungus that can kill the canola plant but has no human health risk, is not a major threat to Canadian crops because of resistant crop varieties. However, it is commonly found on canola seed.

Blackleg is present in China, but the Chinese government maintains it is a less serious form than the disease in Canada.

The November 15 deadline refers to the date of shipment from Canada.

Talks between Canada and China are scheduled to continue this week, the Canola Council said.

Earlier on Monday, Canadian agriculture minister Gerry Ritz said he was hopeful of a resolution as early as this week.

"They are a global player and have to recognize the science that follows this (blackleg disease)," Ritz told reporters. "I think they're coming to that realization."

Canada is the world's top exporter of canola, which is crushed for its oil to be used in vegetable oil and biofuel, and for its meal, used in livestock feed.

Canadian officials have been in Beijing since late last week, said Ritz, who also met with the Chinese ambassador to Canada last Tuesday.

The seed Canada ships to China is genetically modified for its oil content and is processed, not replanted, Ritz said. China is concerned about dirt moving with the product, he said.

China has large reserves of canola and is using the ban on Canadian canola to reduce its supply, Ritz said.

"They're starting to come to an understanding that this maybe wasn't a good move on their behalf," he said. "I also explained to the ambassador that if they thought this was a great way to try and negotiate a better price, think again. We still have probably at least half of our canola still in the field with the weather conditions that are there."

Industry estimates suggest up to one-fifth of the Canadian canola crop is lying in fields, too wet to harvest.

An official with the Chinese quarantine authority also expressed optimism earlier on Monday of a resolution this week.

Ritz said that officials from Argentina, the United States and Australia are making the same arguments to China.

"We're not alone in this," Ritz said.

ICE Canada January canola futures closed up a slight 0.1 percent after earlier reaching a two-month high on Monday as traders said talk circulated late of a breakdown in negotiations.

China has told Australia that it will not accept its canola with blackleg as of October 15, the Canola Council of Canada said, The United States Department of Agriculture has said its small canola exports to China have not been affected by China's stance on blackleg.

Editing by Marguerita Choy

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