If you follow national news or agriculture news, then the political discourse between the Canadian and Chinese Government is nothing new. If you haven't been following, Canada is holding the chief financial officer of Huawei, a major tech company in China, Meng Wanzhou under multiple fraud charges. China has responded in multiple ways, and it's believed they've stopped receiving Canadian canola into their country as part of that retaliation.
"We've been told it's a quality issue, we still hold hope that that's what it is," says Jean-Marc Ruest, Senior Vice President of Corporate Affairs with Richardson Pioneer, the company that was targeted as the quality issue coming into China. "The fact that we're convinced that our shipments didn't have any quality problems associated with them, our long history of shipping without any problems, no customer complaints, so we're a little bit concerned that it may be something other than what has been alleged but we're still hopeful that it can be quickly resolved."
Richardson-Pioneer is not the only grain buyer and distributor that's being held back from sending shipments into China, all Canadian shipments of the valuable product have been stopped, but a shipment from Richardson was the first to be denied entry and the one that started the issues for the agriculture sector. While the problem has been declared an issue with the quality of the product, Richardson has still not been given a solid response as to what the problem is.
"The first part for us is to understand how long of an issue will be to resolve itself, so currently we're focused on addressing what these technical issues are, the quality issues that have been alleged to be the problem with the shipments. We're comfortable that there were no quality issues and so the Canadian Government and the Chinese regulators are attempting to sort that through, and hopefully we'll be able to solve that quickly."
He adds, "If it's going to be a longer-term situation, the whole thing becomes a little less clear for everybody involved, for producers and for ourselves. We really wish we had a great answer on what happens if it's a longer-term problem but we're still trying to figure that out."
While grain buyers around the country are assuring farmers that the situation is set to be resolved quickly, the prices at the market are showing otherwise. Canola has seen a fairly steady drop throughout the month of March as part of this situation, and since Canada supplies China with around 40% of their canola products, there's a fair amount of cars being left on the rails with nowhere to go.
"It's a thing that this type of business has a lot of is uncertainty related to weather and those types of things and you always hope that the international marketplace is going to be a stable one, and so when you have something like this that hits the system, it just creates more uncertainty that we could certainly do without."
Ruest did go on to add that many of the grain elevators are looking for other markets to send the canola to to try and keep the market flowing, but all of this takes time in emergency situations such as this.