More trade restrictions may come after court ruling against Huawei CFO: Burton
Optimism that China may end its yearlong trade spat with Canada over canola imports is fading after a court ruling against a Huawei Technologies Co. executive in Vancouver.
A judge ruled Wednesday that extradition proceedings may continue against Meng Wanzhou, Huawei’s chief financial officer. That has dampened hopes that the Asian nation may reinstate export licences of Canadian canola shippers before farmers harvest a new crop this fall, said Tony Tryhuk, the branch manager of an RBC Dominion Securities office in Winnipeg, Manitoba.
While there were signs China could be set to ease restrictions on imports of the Canadian oilseed, the market has “deflated” and now sees that as increasingly unlikely, he said. Canola futures fell 0.5 per cent to $461.40 a ton on ICE Futures U.S. in New York on Thursday.
“The hope may have been dashed with respect to making any sales in the immediate future,” Tryhuk said. “Our hopes for a return to normalcy are resting on the outcome of this detention. Until that changes, I don’t think anybody sees a door opening.”
Last year China suspended the licences of two major Canadian shippers, Glencore Plc’s Canadian grain unit Viterra and Richardson International, citing pest and quarantine concerns, although the move was widely seen as retaliation over Meng’s arrest. Canada is the top grower and exporter of canola, an oilseed used in everything for deep-frying to salad dressings.
The disruption has resulted in an estimated $1 billion in lost revenue last year, according to the Canola Council of Canada. While there should not be a link between a court decision and Canada’s canola trade, the industry is concerned that could be the case and is dissatisfied they have not been able to have export permits restored, said Jim Everson, the council’s president. The industry will continue to work toward a solution, he said.
“It’s really hard to be optimistic given the messages we’re receiving about the judicial decision,” Everson said by phone.