China’s rapeseed meal futures sunk 4.6% on Monday on hopes that Beijing would ease an anti-dumping probe on imports of Canadian rapeseed after Ottawa said it would grant firms temporary relief from tariffs on Chinese electric vehicles.
The world’s biggest canola importer has disrupted the market by announcing the anti-dumping investigation, a move seen as retaliation against Canada’s 100% tariffs on Chinese-made EVs and other products.
Canada, which imposed the tariffs starting Oct. 1, on Friday announced measures for Canadian firms to request a temporar remission of the tariffs that include steel and aluminium products.
China’s most active rapeseed meal futures on the Zhengzhou Commodity Exchange fell to 2,308 yuan (USD 324.99) per metric ton on Monday, its lowest in nearly seven weeks.
The market is speculating that Canada’s relief measures might help ease trade tensions between the two countries and encourage China to delay its anti-dumping investigation or ease its countermeasures, said Liu Jinlu, agriculture researcher at Guoyuan Futures.
“The news has erased an accumulation of bullishness in the vegetable meal and oil market,” she said.
Canada is the world’s biggest exporter of the oilseed used for cooking oil, fuel and animal feed and China’s biggest supplier.
The rapeseed, or canola, trade between the two countries is worth about $2 billion a year.
However, China is still facing a large inventory of rapeseed and soy meal that continue to weigh on the market.
Australia would be the likely winner from a shift in global canola trade flows should China impose tariffs on Canadian imports of the oilseed, but Beijing will need to overcome worries about a fungus.
