China's canola meal supply may fall as import rules to tighten -analysts

BEIJING, March 3 (Reuters) - China may suffer a shortage of
canola meal, a protein-rich feed ingredient, after Beijing plans
to toughen the import standards for the oilseed from major
exporters, industry analysts said.
China will allow no more than 1 percent of foreign material
in canola shipments starting April 1, the country's quarantine
agency said last month. The higher standard may be costly for
Canadian exporters, resulting in the country taking a more
cautious approach to selling canola to China.
Canada is China's largest supplier of the oilseed, known
also as rapeseed. Industry participants have speculated that the
higher standard is part of a plan to reduce China's large canola
oil stockpiles by reducing seed imports rather than because of
concerns about the transmission of the blackleg fungus.
Expectations of low canola oilseed imports coupled with a
big drop in the domestic harvest means China may have to
increase imports of canola meal this year to meet the needs of
the fish-farming sector, the three analysts said.
"There will be a shortage of canola meal at home. Feed
mills may have to increase imports whenever prices are
favourable," said one industry analyst with an official
think-tank.
Chinese feed mills consume about 11 million tonnes of canola
meal a year and soymeal has already replaced the use of canola
meal to a large extent since 2015. The replacement would
continue this year and that would cap the growth of imports, the
analysts said.
But for fish farming, canola meal can not be replaced fully,
they said.
"But imports would not return to the 2011 level, though
there could be a short-term spike during the peak consuming
season" from May to August, said Xu Aixia, an analyst with
Everbright Futures Co. Ltd.
China imported a record 1.38 million tonnes of canola meal
in 2011 after Beijing banned canola imports from Canada due to
fungal disease in 2009.
Canola is crushed into meal and edible oil.
Beijing has been selling its sizable state rapeseed oil
reserves, equivalent to about one year of consumption.
This week, the government sold 93,041 tonnes at an average
price of 5,335 yuan ($815.40) per tonne, slightly lower than
last week's sale of 105,488 tonnes. This week's sale brought the
government's total sales to 625,000 tonnes since December when
inventory sales restarted. = 6.5428 yuan)