Canada and China agreed to reduce canola tariffs by 6 times, after which quotes increased by 3.8%

Canadian Prime Minister Mark Carney, during his visit to China last week, agreed to reduce tariffs on Canadian canola, effective from August 2025, from 75.8% to 15%. Carney said the new tariffs will remain in place until at least the end of the year, and that increased tariffs on Canadian canola meal will also be suspended.

The tariff reduction will restore Canadian canola exports to China and support producers and exporters who have been looking for new markets amid the oversupply.

Recall that the difficulties in trade between Canada and China intensified after Canada imposed tariffs on Chinese goods, after which China imposed a 100% tariff on Canadian canola and meal.

March canola futures have risen 5.8% to CAD 640/t or $461/t over the past two weeks, in line with last year's level, but remain under pressure from a large canola harvest in Canada and the world, as well as significant soybean and oil stocks in China, which will prevent canola supplies to China from increasing in March, when soybean prices will fall amid a record harvest in Brazil.

So far, Canada has not been able to increase canola supplies to the EU, as in the 2025/26 MY, EU countries reduced rapeseed imports compared to the previous season by 42% to 1.94 million tons. At the same time, according to the European Commission, the share of imports from the main supplier countries - Australia and Ukraine - has sharply decreased.

In the 2025/26 MY (as of January 11), rapeseed supplies from Ukraine to the EU decreased by 45.4% compared to the previous season to 1.141 million tons, and their share in European imports decreased from 62.9% to 58.8%. Supplies from Australia decreased by 71.3% to 250 thousand tons, and their share decreased from 26.2% to 12.9%. At the same time, supplies from Moldova increased by 189% to 247 thousand tons, and their share increased from 2.6% to 12.8%.

Recall that in 2024/25, the EU increased rapeseed imports compared to the previous season by 31% to 7.447 million tons, of which 3.51 million tons were supplied from Australia, 2.41 million tons from Ukraine (a decrease of 23.7%), 1.13 million tons from Canada (an increase of 999%), and the share of Canadian supplies increased from 1.8% to 15.2%.