Question Period Note: SOYBEAN EXPORTS TO CHINA

What actions is Canada taking to support the Canadian soybean sector?

1. The Government recognizes that there has been a sharp decline in exports of Canadian soybeans to China.

2. There are a range of factors that have contributed to the decline, including lower demand by China as result of African Swine Fever impacting China’s hog sector.

3. While there appear to be non-tariff barriers impacting Canadian exports, there are no official technical restrictions on Canadian soybean exports to China.

4. We are working with the sector to help them manage these challenges, including through efforts to help diversify to other markets.

At this time, the current official actions taken by China on Canadian agricultural products are limited to canola seed. While there have been reports of trade disruptions covering a broad range of Canadian agricultural products to China, Canada has not received any formal notification from Chinese officials to that effect. However, based on information from Canadian Embassy officials and Canadian companies, there appears to be increased inspection activities occurring for Canadian products at several ports in China. Furthermore, there have also been reports from several independent sources that Chinese importers are hesitant to sign contracts for some Canadian products, including soybeans, given uncertainty in the market and the apparent increased inspections for Canadian exports.

Due to the apparent increased inspection burden and costs on soybean importers, and anecdotal reports of other pressures, Chinese buyers ceased purchases of Canadian soybeans, creating a defacto closure on imports from Canada, in particular bulk vessel soybean shipments.
Relatively small domestic consumption for soybeans means Canada relies on export markets to sell excess production capacity annually. Canada exports approximately 70% of its total production annually.
China was Canada’s largest export market for soybeans in 2018, with Canada shipping 3.5 million tonnes valued at $1.7 billion. Canadian soybean exports to China represented almost 64% of total exports to all countries by volume in 2018.
Canada has exported only 36,770 tonnes of soybeans to China in 2019 (January-September), with 504,346 tonnes exported during the same period in 2018. This represent a drop of 92.7% year over-year. Exports to China in 2019 are believed to be primarily food-grade soybeans shipped by container, with no full bulk vessel shipments since December 2018.
Soybeans grown in Western Canada represented an average of 73.2% (1.1 million tonnes) of total Canadian soybean exports destined for China between 2016 and 2018.

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