China tightens trade rules as Canadian tariffs spark price volatility
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<p>Some wonder if prairie producers might be considering a return to organic canola, despite the problems caused by the proliferation of GM canola. Photo: Greg Berg</p>
Beijing | Reuters — Zhengzhou Exchange on Tuesday raised the trading margin requirements for some rapeseed (canola) meal futures contracts to 9 per cent from seven per cent after Beijing’s 100 per cent tariff on Canadian imports triggered a two-day rally that pushed prices to a five-month high.
The most active rapeseed meal futures contract CRSMcv1 surged 7.23 per cent to close at 2,684 yuan per metric ton (C$538.68) building on a six per cent gain in the previous session, to its highest since September 2024.
The new trading margin requirements will be effective from settlement on March 12.
Why it matters: China is a major market for Canadian agricultural goods like canola and pork
China on Saturday shocked markets with a 100 per cent tariff to just over $1 billion (C$1.44 billion) of Canadian canola oil, oil cakes and pea imports, and a 25 per cent duty on $1.6 billion (C$2.31 billion) worth of Canadian aquatic products and pork.
The tariff announcement has sparked heightened market volatility, prompting the exchange to implement stricter margin rules to manage risk.
Earlier on Monday, the exchange increased the minimum order size for rapeseed meal futures contracts to curb small investor participation and stabilize prices.
According to Chinese customs data, China imported 2.02 million tons of canola meal from Canada in 2024, accounting for 73 per cent of its total imports. Other major suppliers include the UAE, Russia and Ukraine.
“After tariffs, importers may face losses and contract defaults. Spot supply is sufficient now, but reduced imports could tighten future supply. For rapeseed meal, demand may need to be curbed while monitoring shifts in the global trade chain,” a China-based trader said.
“In the short term, this is expected to have minimal impact on the domestic supply of edible vegetable oils. However, the long-term effects of the trade policy implementation will require further attention,” the Agriculture Ministry said in a monthly report.
