CALGARY -- The head of a national group that represents canola farmers says they're concerned that China's plan to impose stricter import regulations on the crop this week will put them at a competitive disadvantage and clog Canada's grain terminals.
China says it will allow canola shipments containing no more than one per cent of waste product starting Thursday, compared with the 2.5 per cent allowance today. The waste, known as dockage, includes parts of the canola plant other than seeds, as well as weeds and other crops.
Those tougher restrictions coming from Canada's largest canola buyer will mean grain traders will have to pass on the higher costs of processing to farmers, said Rick White, CEO of the Canadian Canola Growers Association.
"Those higher physical costs of cleaning down to that level ... will be passed back through the industry and farmers will certainly be picking up their share," White said Monday.
He said he's also concerned the new rules will delay grain shipments going through western terminals because they will need more time to sort through the canola and clean various equipment.
The dispute comes as Statistics Canada is expecting some bumper grain crops this year, including 17-million tonnes of canola for the third-biggest harvest on record. It also could become an irritant during Prime Minister Justin Trudeau's visit to China this week.
Luo Zhaohui, China's ambassador to Canada, said last week he hopes the issue doesn't mar Trudeau's trip. At the same time, Zhaohui said Canada has been inflexible.
China is the largest customer of Canadian canola, accounting for 40 per cent of exports of the oilseed worth about $2 billion annually.
The Chinese government has said it's imposing the new regulations to prevent a disease called blackleg from being brought into the country, but industry representatives say there's no scientific basis for that.
Brian Innes, vice president of government relations at the Canola Council of Canada, said the industry is united in pushing for science-based terms, despite reports that some shippers have made deals under the stricter terms.
"The whole canola industry is united in seeking a science-based solution," said Innes. "Whether one vessel goes or three vessels go doesn't change the fact that the one per cent dockage is being imposed on the Canadian system without justification."
Norm Hall, president of the Agricultural Producers Association of Saskatchewan, said the rules are a way for China to use up some of its stockpiles of canola.
"I think it's more China using it as a non-tariff barrier," Hall said Monday. "They're using that to slow down the sales and make sure that their mills use some of their own production."
CIBC analyst Jacob Bout concluded in a note to clients Monday that the regulations are a "flushing mechanism for high oilseed inventories in China." But he said he still expects record canola exports to China.
A spokesman for International Trade Minister Chrystia Freeland said in an email Monday that she continues to raise the issue with her Chinese counterparts in the hopes of reaching a "long-term solution, based on science, for our Canadian producers."
Innes said he's seen a strong focus from both countries on the issue as the imposition date looms.
"We have seen that discussions have intensified over the last weeks and days and hours," he said.
Gerry Ritz, the Tories' parliamentary critic for international trade and former agricultural minister under Stephen Harper, said the current government hadn't given the issue enough attention until recently.
"I think they've ignored it to this point," said Ritz. "All of the sudden we're at the 11th hour and they say they're somehow going to wave a magic wand and this will all be better.
"Of course, it doesn't work that way."
