Viterra is now the second Canadian company to have China revoke its Canola export license.
Earlier this month Richardson International had its license to sell Canola into China revoked; the Chinese saying it was a result of “pests of concern” found in their canola shipments.
Last week, Jim Everson, President of the Canadian Canola Council said that Canada has been seeing very limited sales of canola seed into China.
He says its clear importers in China are demonstrating an unwillingness to buy Canadian Canola.
Neil Townsend is a Senior Market Analyst with FarmLink Solutions says China backing off from the market is impacting producer returns.
“If you wanted to talk about the tradable value, it kind of ebbed and flowed up until maybe the middle of January. Farmers is they were patient in most areas could obtain close to $11 per bushel. I’d say now it’s difficult to find you know consistent $10.50 per bushel prices for canola.”
Townsend says there’s no real explanation yet as to just how long this could linger or when and how it can be resolved.
He says producers need to know their numbers and should be looking at their own strategy right now.
“We’re in a kind of political game. Going forward I just think it makes it very, very important to understand your returns on investment, your profit per acre and to try and to protect those as much as possible. You know we do face some headwinds going into next year on prices and it’s important to kind of operate in such a way that you protect your ability to continue to operate.”
Townsend says producers feel powerless right now with what’s happening in China and the impact it’s having on the markets with Canola down 50 cents a bushel.