Chinese purchases of Canadian soybeans have suddenly “slowed to a trickle” after posting record gains last year amid ongoing diplomatic tensions between Beijing and Ottawa.
Exports of Canadian soybeans to China plunged to 3,282 tonnes in the first three months of the year — a 95 per cent decline compared to the same period a year earlier, according to Soy Canada. The abrupt drop in exports is even more dramatic when viewed in relation to the final four months of 2018, when Chinese purchases of Canadian beans hit a record 3.2 million tonnes.
The sudden decline comes alongside news, first reported by the Wall Street Journal, that Chinese customs authorities have ramped up inspections of Canadian shipments of the crop.
“Trade with China has fallen off a cliff,” said Ron Davidson, executive director of Soy Canada in an interview. “We had really good sales until suddenly after December they slowed to a trickle. Now exporters are being told that their shipments being held for further testing and they are testing for things they haven’t tested for before.”
Chinese authorities are currently holding two small 20- to 25-tonne containers of Canadian soybeans at the Yantian port of entry in order to test for “planned pathogens” or common plant diseases, Davidson added.
The abrupt drop in exports comes after Canada’s soybean sales to China rose 80 per cent to nearly 3.6 million tonnes in 2018 compared to a year earlier. China bought 60 per cent of Canadian soybean exports in 2018.
The spike in sales to China came as Beijing’s 25 per cent tariff on U.S. soybeans upended global trade flows and sent Chinese buyers hunting for alternative suppliers.
“Last year was a record year for sales to China so this is sudden,” Davidson said. “We don’t know all the ramifications yet and we don’t know why it’s happening or whether its anything like the canola situation.”
China stripped the import permits of two Canadian canola exporters – Richardson International and Viterra – in March and halted purchases of the crop citing concerns about “prohibited pests” found in shipments. Prime Minister Justin Trudeau last week linked the canola dispute to Canada’s diplomatic feud with China that began when Canadian authorities arrested Huawei chief financial officer Meng Wanzhou in Vancouver on Dec. 1. The arrest, made on a U.S. extradition request, was followed by the detentions of Canadian citizens in China in apparent retaliation.
A representative for Canada’s agriculture minister Marie-Claude Bibeau did not immediately respond to a request for comment.
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