In a recent development, China has declared its intention to conduct an anti-dumping probe into canola imports from Canada.
What Happened: This decision comes in the wake of Canada’s move to impose tariffs on Chinese electric vehicles, leading to a significant rise in domestic rapeseed oil futures prices, Reuters reported on Tuesday.
In addition to canola, China will also scrutinize certain Canadian chemical products for dumping. Over half of Canada’s canola production is exported to China, the world’s largest oilseed importer. Canola, also known as rapeseed, is used in cooking oil and a variety of products, including renewable fuels.
Canada, following in the footsteps of the United States and the European Union, announced a 100% tariff on Chinese electric vehicle imports and a 25% tariff on imported steel and aluminium from China last week. China’s commerce ministry has expressed strong opposition to these “discriminatory unilateral restrictive measures.”
Following China’s announcement, the country’s rapeseed meal futures on the Zhengzhou Commodity Exchange rose by 6%, reaching its highest point since Aug. 6. On the other hand, the ICE canola contract for November delivery fell by 7% to $569.7 per metric ton.
Canada’s canola exports to China, which amounted to $3.47 billion in 2023, are suspected of dumping due to a 170% year-on-year increase in volume and a continuous decline in prices. This has reportedly led to losses in China’s domestic rapeseed-related industries.
China primarily imports its canola from Canada, followed by Russia and Mongolia. In 2023, China imported 5.5 million tons of canola, valued at $3.72 billion, with 94% of the total coming from Canada.
China has also initiated trade investigations on imports of pork, brandy, and dairy from the European Union in response to curbs on its electric vehicle exports. The Chinese spokesperson stated that it plans to resort to the World Trade Organization dispute settlement mechanism for Canada’s relevant practices.
Why It Matters: The Chinese Embassy in Canada has strongly objected to the 100% tariffs imposed on Chinese EVs, describing Ottawa’s claims of “overcapacity” in China’s electric vehicle industry as “groundless.”
China’s state media also criticized Canada’s decision, describing it as a self-inflicting move.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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