A paddock containing a crop of canola ican be seen near a dirt road located on the outskirts of the town of Mallala, north of Adelaide, South Australia, August 22, 2018.
The purchase price is reported to be below $600 per ton, including freight costs, the traders noted. "One cargo is a done deal, and there is talk they are going to buy more," said a Singapore-based trader. "Very soon there are going to be more deals." COFCO has not yet responded to requests for comment.
In July, reports indicated that Australia, the world’s second-largest canola exporter, was nearing an agreement with China to permit trial shipments of canola. It is unclear whether COFCO’s recent acquisition is part of this arrangement. China, the largest global importer of canola, has primarily relied on Canada for its supply. However, a temporary 75.8% levy imposed on Canadian canola last week is expected to reduce imports from Canada.
"The price is very competitive when considering crush margins for canola in China," said another Singapore-based trader. The canola, sourced from Australia’s upcoming harvest, is expected to arrive in China by late December or early January. The cargo consists of genetically modified organisms (GMO), which require specific licenses for import into China.
Obtaining GMO approval was a critical step for resuming Australian canola imports, according to two sources familiar with the process. On Friday, China’s Ministry of Agriculture and Rural Affairs granted seven GMO Safety Certificates to COFCO Oils & Oilseeds Trading Co., a subsidiary of COFCO, though specific details were not disclosed. The ministry has not yet responded to inquiries for further information.
This development signals a potential shift in China’s canola import strategy, diversifying its sources amid changing trade dynamics.
