Renewed trade hopes as Australian canola shipment clears Chinese customs for first time in 5 years after ban

Australia’s first cargo of canola sent to China in five years has cleared inspection, sparking hopes of a renewed trade pathway at a time when WA is on track to produce nearly half of the nation’s canola crop. The bulk carrier Armonia A docked at the Port of Esperance on November 5, and departed with a cargo of about 60,000 tonnes of canola on Saturday, November 8, for the Port of Xinsha in China’s south. It cleared customs in late January. The commercial shipment was co-ordinated by CBH Group’s export arm CBH Grain Pty Ltd. At least three trial cargoes of the oilseed were booked by China for 2025’s fourth quarter, marking the first shipments since Australia was shut out of the market in 2020 over phytosanitary concerns. Australian farmers are expected to harvest 6.45Mt of canola this harvest, 3.82Mt of which is expected to come from WA. Grain Trade Australia chief executive Pat O’Shannassy said he was optimistic about the re-establishment of the canola trade to China following the trial shipment. He said he was unsure about why the particular shipment had been delayed through customs in China — which he could not confirm was the shipment that departed from Esperance — but said it was not unusual in establishing new trade procedures. “What the trial is about is sort of establishing processes and procedures, and making sure that there is some extra diligence around it — because it is a trial,” Mr O’Shannassy said. China’s ban on canola exports in 2020 came amid a high-profile trade war with Australia, which targeted a raft of products including barley, wine, cotton, coal, lobster and beef. The East Asian giant claimed it had detected blackleg disease in shipments — ending what was once a $1.7 million per year trade between the two countries. Barley exports from WA to China — once Australia’s biggest market — resumed in August 2023 after the lifting of an 80 per cent tariff on Australian barley that effectively ended the trade. Mr O’Shannassy said he had not heard if any further shipments of canola had been booked from Australia to China, but said “no news is good news” which suggested all was well with the attempt to resume the international trade. “There’s been a lot of work put into it be a lot of people from both sides, and they’ve gone through it, so hopefully all that work will pay off,” he said. “Both sides approached it in good faith, trying to get the trade flow moving again, so you would hope that all goes through and things get ticked off, and we can move forward.” The Federal Department of Agriculture, Fisheries and Forestry declined to comment directly on the shipment or if any other shipments had been booked as part of the trade trial. The canola ship was included in a trial of a closed pathway as part of an active and ongoing negotiation between the two countries, and was a commercial arrangement between the Australian exporter and Chinese importer. Episode 3 co-founder and market analyst Andrew Whitelaw said if trade were to reopen to China, it would be a “great news story” for Australian canola growers. Before canola exports to China ended in 2020, the East Asian country bought 20-30 per cent of all Australian canola. “The market for canola has been — despite the fact that it’s fallen back a bit — prices are lower than they were, and they’re not at those peaks we saw two, even three, years ago,” Mr Whitelaw said. “But that was a completely different set of circumstances where Canada had a terrible crop and Ukraine had a terrible drought, and war started, which pushed those prices extremely high. “What we’re seeing now is a situation where it’s a bit more balanced — the supply and demand situation.” Mr Whitelaw said the “bullishness” of canola as a crop made it an attractively priced crop in comparison to wheat or barley. “I would say that the only thing that’s probably a benefit, or thing that’s changed quite significantly in recent times, is the likes of Canada getting back access to China,” he said. “Whilst they (China) were trialling a couple of cargoes with us, that may slow down a bit as they switch back to Canadian canola — but Canada being the market into China will also potentially help our GM canola prices.” The Grain Industry Association of WA’s final crop report outlining the State’s total grain harvest tonnage — including the State’s canola crop total — is expected to be released on February 13.