Chinese purchases of Canadian soybeans have "slowed to
a trickle," plunging 95 per cent in the first few months of the year amid
ongoing diplomatic tensions between Ottawa and Beijing, reports the Financial
Post. 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.
Exports of Canadian soybeans to China plunged to 3,282
tonnes between January and March, down from 72,806 tonnes during 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 soybeans hit a record 3.2 million tonnes.
"Trade with China has fallen off a cliff," Ron
Davidson, executive director of Soy Canada said 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."
Officials are currently holding two small 20 to 25 tonne
containers of Canadian soybeans at the Yantian port of entry in order to test
for "plant 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 became Canada's largest market for the crop last year
- representing 60 per cent of soybean exports - 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.