Canola farmers in Saskatchewan are feeling the impacts of a 75.8 percent Chinese tariff on Canada that came into effect, as the two countries continue to hash out their economic disagreements through economic policy that will inevitably place an unprecedented strain on the market.
Last year’s crop proved that Canada was the biggest exporter of canola, representing nine million tons out of 17 million tons of total trade, while China was one of the biggest buyers with five million tons.
The crop has dealt with a number of major challenges over the years including rising costs of fertilizer, inputs, and equipment, while the price of the output has not increased relative to those costs. This year, the crop is looking good because of rain, but the market is not.
China has introduced the tariffs as an ‘anti-dumping’ measure. They are paying the duty up front and then if dumping is not found, the duty can be returned, but the conditions around those decisions are considered dubious.
New trade partnerships with places like the EU will bode well for Canada in this case, as demand for canola is growing overseas, so a more diverse market will mean more protections for the farmers who are feeling the strain of the uncertain relationship with China.
