The provisional rate will be set at 75.8 per cent, effective from August 14, the Chinese Ministry of Commerce said.
Canola Council of Canada president Chris Davison said that rate makes the Chinese market effectively closed for Canadian canola, to which Canada exported about C$5 billion ($A5.60 billion) of the oilseed crop in 2024.
ICE November canola futures fell as much as 6.5 per cent to a four-month low after the announcement.
“This really came as a surprise and a shock,” trader Tony Tryhuk of RBC Dominion Securities said.
China, the world’s largest importer of canola, sources nearly all its supplies of the product from Canada.
The steep duties would likely all but end imports if they are maintained.
“This is huge. Who will pay a 75 per cent deposit to bring Canadian canola to China? It is like telling Canada that we don’t need your canola, thank you very much,” one Singapore-based oilseed trader said.
China imposed tariffs on canola oil and meal in March.
Canada is now in a trade conflict with the world’s two largest economies, as it also faces tariffs on goods from the United States.
Canada’s number one canola market is the US, followed by China.
China’s Ministry of Commerce said an anti-dumping probe launched in September 2024 had found that Canada's agricultural sector — particularly the canola industry — had benefited from substantial government subsidies and preferential policies.
The Canadian Government and canola industry have previously rejected allegations of dumping.
The industry believes China’s complaint is based on other ongoing trade and political disputes, Mr Davison said.
A final ruling could result in a different rate, or overturn the August 12 decision.
Replacing millions of tons of Canadian canola is likely to be difficult at short notice, analysts say.
China uses imported canola to make animal feed for its aquaculture sector, as well as for cooking oil.
The move provides an opportunity for Australia, which looks set to regain access to the Chinese market with test cargoes this year after a years-long freeze in the trade, Trivium China agriculture analyst Even Rogers Pay said.
Australia, the second-largest canola exporter, has been shut out of the Chinese market since 2020 due mainly to Chinese rules to stop the spread of fungal plant disease.
However, even if Australian imports increase, “fully replacing Canadian canola will be very difficult unless import demand drops sharply,” said Donatas Jankauskas, an analyst with commodity data firm CM Navigator.
Mr Davison said his industry believes China will need Canada’s canola to meet the sort of demand it has experienced in recent years.
“I think the expectation would be that they could not meet those needs with a quality of a product and the volume that we provide,” he said.
Canadian farmers are about to begin harvesting canola and will not be happy to see prices plunge, Canadian Canola Growers Association president Rick White said.
As long as the prohibitive duty is there farmers face suppressed prices.
“It’s going to certainly have a damping effect on price for farmers and they’re going to be stuck with that,” Mr White said.
– with AAP.
