UPDATE 2-China delays new Canadian canola standard after talks

(Adds comments from Canola Council, trader, market impact)
By Rod Nickel
WINNIPEG, Manitoba, March 29 (Reuters) - China has delayed
implementing a tougher standard on Canadian canola shipments,
just days before it was to take effect, as a result of talks
between the countries.
For six years, Beijing has raised concerns about possible
transmission of blackleg disease, caused by a fungus, to Chinese
crops, putting at risk some C$2.1 billion ($1.60 billion) in
Canadian exports.
But China has repeatedly shown flexibility after announcing
trade limitations against Canada, its major supplier of canola.
China's new standard for foreign material in canola
shipments will take effect Sept. 1 instead of April 1,
Counsellor Yang Yundong, spokesman for the Chinese Embassy in
Ottawa, said in an email late on Monday.
The new standard will allow no more than 1 percent foreign
material, such as straw and other plant seeds, per shipment,
compared with the current maximum of 2.5 percent. Even with that
tougher standard, Beijing estimates that more than one-quarter
of its canola crop would be at risk of blackleg infection, which
could reduce yields.
Yang said his government hoped Canada would take "effective
measures so that the issue could be resolved at an early date.
"The measures taken by the relevant Chinese authorities for
that purpose are very much science-based and reasonable," he
said.
The Canola Council of Canada, whose directors include
farmers as well as exporters Cargill Ltd CARGIL.UL and
Richardson International, says there is no significant risk of
spreading the disease through foreign material.
The next five months will be spent on research to confirm
its position, said Canola Council President Patti Miller.
"For (exporters) who had made sales out into the future,
they'll be able to trade based on current terms, and that's very
welcome," she said. "We're solid on what we believe the
scientific results are."
Canada is the world's biggest producer of canola, also known
as rapeseed.
Some traders in both countries have said they believe
China's main motivation for the new standard is a need to slow
imports due to large domestic rapeseed oil stocks.
China's quarantine authority, AQSIQ, told the Canadian
government on Feb. 23 that it was planning the new measure.
Despite the delay, Canadian exporters are reluctant to book
new sales to China, said one Canadian canola futures broker.
ICE Canada canola futures for July delivery RSN6 rose 0.9
percent, but the November contract's RSX6 gains were more
modest, reflecting China's standard taking effect in September.
($1 = 1.3109 Canadian dollars)