Canola prices took a sharp dive on Monday, hitting the exchange limit, following China’s announcement of retaliatory tariffs on Canadian rapeseed oil and meal. The tariff imposition, a direct response to Canada’s levies on Chinese electric vehicles, steel, and aluminum, sent the most-active canola contract down by C$40 ($28) per ton, marking a loss of more than 6%.
Over the weekend, China’s Ministry of Finance revealed a 100% tariff on Canadian rapeseed oil and meal, as well as a smaller tariff on imports of pork and some seafood products. The decision comes as trade relations between Canada and China continue to sour, with Canada being one of the world’s largest rapeseed producers, and China being a major importer of Canadian rapeseed products.
Canada exports more than half of its rapeseed to China, and the tariffs threaten to disrupt a significant portion of its agricultural exports. The move places additional pressure on incoming Prime Minister Mark Carney, who now faces escalating trade conflicts not only with China but also with the United States, following President Donald Trump’s imposition of broad tariffs on Canadian imports.
China’s decision to levy tariffs on Canadian rapeseed oil and meal follows Canada’s own trade measures imposed last year, including a 100% tariff on electric vehicles from China and a 25% duty on Chinese steel and aluminum. While Canada remains China’s top supplier of rapeseed meal, the volume of rapeseed imports is notably higher, with China importing 6.39 million tons of rapeseed in 2024, nearly all from Canada. Additionally, Canada supplied about 2.74 million tons of rapeseed meal to China, according to Chinese customs data.
The sharp decline in canola prices underscores the growing tensions in global trade, and the impact of retaliatory tariffs on Canada’s vital agricultural sector.
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