Australia Nears Breakthrough in Canola Trade Talks with China

Australia is close to finalizing a deal with China to resume canola exports after a four-year suspension, according to sources familiar with the matter. The agreement could allow five trial shipments of Australian canola, totaling 150,000 to 250,000 metric tons, into China, the world’s largest canola importer.

China, which typically relies on Canadian canola, imposed 100% tariffs on Canadian canola meal and oil in 2025 amid diplomatic tensions. With Beijing launching an anti-dumping probe into Canadian imports, alternative suppliers are gaining attention. Australia, the second-largest canola exporter, has been blocked from the Chinese market since 2020 due to phytosanitary concerns, particularly over blackleg fungal disease and impurity levels exceeding China’s 1% admixture threshold.

Negotiations between Australian and Chinese officials have progressed, aiming to align Australia’s export standards with China’s stringent requirements. If successful, this could reduce Canada’s market share and lift Australian canola prices, traders say. However, Australia’s upcoming harvest is expected to yield just 5.7 million tons—the lowest in five years—due to poor weather and reduced planting.

Despite limited supply, exporters hope the trial will pave the way for renewed long-term trade. Smaller test shipments of 500 tons were made in June and July 2024, offering a precedent for the trial run.

The potential agreement comes as Australian Prime Minister Anthony Albanese visits China, reflecting improved diplomatic ties since 2022. China’s canola stockpiles were down to 159,000 tons as of early July, the lowest since 2021, highlighting growing demand.

While final details are pending, both sides are optimistic. “It looks like we’ve found a pathway that works for everyone,” said one industry source. If the trials succeed, Australian canola could re-enter one of its most lucrative markets.