The renewals are a relief to U.S. farmers and meat companies as they navigate trade disputes with major agricultural importers, including China and Canada, under President Donald Trump.

Why it matters: Both the U.S. and China have been major markets for Canadian meat exports

China is understood to have renewed for five years registrations for U.S. pork and poultry facilities that expired in February and over the weekend, according to the U.S. Meat Export Federation and the USA Poultry and Egg Export Council. Both groups said that U.S. beef facilities had not yet been renewed.

Shipments continued to clear customs from facilities with lapsed registrations, but U.S. exporters were unsure how long that would last.

“We were on pins and needles for a while,” said Greg Tyler, CEO of the USA Poultry and Egg Export Council.

Beijing requires food exporters to register with customs to sell products in China.

China’s customs website showedregistrations for more than 1,000 U.S. meat plants granted by China under the 2020 “Phase 1” trade deal lapsed on Sunday. That was roughly two-thirds of all those registered.

The trade deal ended the previous U.S.-China trade war with a pledge from Beijing to boost its purchases of U.S. goods and services, including meat, by $200 billion (C$285.7 billion) over two years. China did not reach the target, which was agreed shortly before the COVID-19 pandemic hit.

The U.S. Department of Agriculture did not immediately respond to a request for comment. The agency previously said China did not respond to repeated requests to renew plant registrations, potentially violating the Phase 1 agreement.

“We’re pleased to see progress on the pork facilities and hoping for similar news on beef as soon as possible,” said Joe Schuele, spokesman for the U.S. Meat Export Federation.

Beijing imposed retaliatory tariffs on some $21 billion (C$30 billion) worth of American farm goods this month, including 10 per cent duties on U.S. pork, beef and dairy.

In 2024, the U.S. was China’s third-largest meat supplier by volume, trailing Brazil and Argentina and accounting for nine per cent of China’s total meat imports. U.S. meat shipments to China reached $2.5 billion (C$3.6 billion) last year, making it the second largest exporter by value.

Exports of U.S. poultry products have suffered due to outbreaks of bird flu, but China remains an important market, Tyler said.

“We needed that market to stay open and these renewals were very important to that,” he said.

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Canola meal futures traded on the Zhengzhou Commodity Exchange have jumped more than eight per cent since Beijing announced on Saturday a 100 per cent retaliatory tariff on imports of canola meal and oil from Canada effective March 20.

Why it matters: Canadian farmers have seen canola prices plummet after China slapped tariffs on canola oil and meal

“The introduction of this tax increase policy instantly broke the original trade balance,” consultancy Mysteel wrote in a note.

Chinese tariffs on canola meal and oil came as a surprise to the industry which had been expecting higher duties instead on the oilseed since Beijing started an anti-dumping investigation in September into shipments from Canada.

“Everybody was expecting authorities to announce duties on rapeseed but we were all taken by surprise when this announcement came on oil and meal,” said one trader in Singapore. “It is going to hit feed processors hard as they were looking at importing larger volumes of Canadian meal instead of the oilseed.”

Canola (rapeseed) is an oilseed crop which is processed into oil for cooking and a variety of other products, including renewable fuels, while the remaining canola meal is used as high-protein animal feed and fertilizer.

China relies on top grower Canada for more than 70 per cent of its canola meal imports and nearly all of the oilseed imports.

For now, China has ample supply of canola, meal and oil after hefty imports in the fourth quarter last year, buffering against an immediate supply shock.

But traders and analysts warned of an impending shortage by the third quarter of this year when the stockpile depletes.

Limited canola meal available

Chinese customs allows canola meal imports from 11 countries, including Russia, Kazakhstan, Pakistan, Japan, Ethiopia, Australia, India and Belarus, providing options for alternative supplies.

But availability of the product is limited in the international market.

In 2024, China imported 2.02 million metric tons of the meal from Canada, followed by 504,000 tons from the United Arab Emirates and 135,000 tons from Russia, according to customs data.

Some of China’s demand could shift to Russia, Ukraine or India, but these countries are unlikely to be able to fully satisfy Chinese appetite, traders and analysts said.

“No country really has the scale Canada has,” Ole Houe, director of advisory services at IKON Commodities in Sydney, said.

Australia, the world’s second-biggest rapeseed exporter, does not have much surplus or the crushing capacity to significantly raise its rapeseed meal exports, Houe said.

India is the world’s second-largest canola meal exporter and ships around 2 million tons of meal annually, although higher prices capped 2024 shipments to China at only 13,100 tons.

In order to make up for the supply gap, the market may rely more on domestic canola meal or turn to soybean meal, Rosa Wang, analyst at Shanghai-based agro-consultancy JCI, said.

The majority of animal feed producers in China rely on soymeal as a key protein source. However, some industries, particularly aquaculture, prefer canola meal.

China in its policy documents said that it will increase the planting of canola this year.

— Additional reporting by Naveen Thukral and Rajendra Jadhav

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The most active rapeseed meal futures contract CRSMcv1 surged 7.23 per cent to close at 2,684 yuan per metric ton (C$538.68) building on a six per cent gain in the previous session, to its highest since September 2024.

The new trading margin requirements will be effective from settlement on March 12.

Why it matters: China is a major market for Canadian agricultural goods like canola and pork

China on Saturday shocked markets with a 100 per cent tariff to just over $1 billion (C$1.44 billion) of Canadian canola oil, oil cakes and pea imports, and a 25 per cent duty on $1.6 billion (C$2.31 billion) worth of Canadian aquatic products and pork.

The tariff announcement has sparked heightened market volatility, prompting the exchange to implement stricter margin rules to manage risk.

Earlier on Monday, the exchange increased the minimum order size for rapeseed meal futures contracts to curb small investor participation and stabilize prices.

According to Chinese customs data, China imported 2.02 million tons of canola meal from Canada in 2024, accounting for 73 per cent of its total imports. Other major suppliers include the UAE, Russia and Ukraine.

“After tariffs, importers may face losses and contract defaults. Spot supply is sufficient now, but reduced imports could tighten future supply. For rapeseed meal, demand may need to be curbed while monitoring shifts in the global trade chain,” a China-based trader said.

“In the short term, this is expected to have minimal impact on the domestic supply of edible vegetable oils. However, the long-term effects of the trade policy implementation will require further attention,” the Agriculture Ministry said in a monthly report.

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The most-active rapeseed meal futures on the Zhengzhou exchange climbed six per cent to close at 2,611 yuan (C$518) per metric ton – the biggest daily rise since September 2022.

Why it matters: China represents a massive market for Canadian agricultural products

Canada’s exports of rapeseed oil, oil cakes and peas were worth roughly $1 billion (C$1.44 billion) last year. The tariffs, effective March 20, come in tandem with a 25 per cent duty on Canadian aquatic products and pork, worth $1.6 billion (C$2.3 billion) in 2024.

The levies follow 100 per cent and 25 per cent tariffs Canada imposed on Chinese-made electric vehicles and steel last year.

The new tariffs are expected to raise the cost of Canadian canola oil, easing domestic oversupply pressure and helping to stabilize rapeseed oil prices, said China Grain Net, an information provider affiliated with state stockpiler Sinograin.

However, analysts say the price spike may not last long.

“China has alternative origins for rapeseed oil such as Russia and the EU and also the Chinese import duty hike could pressure Canadian canola prices, resulting in a sharp decline in product prices,” said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group.

“It also needs to be noted that China has huge rapeseed oil stocks at the moment and the crush capacity utilization is also considerably high,” Bagani said.

Additionally, China’s Zhengzhou Commodity Exchange said it will raise the minimum order size per trade for some rapeseed meal futures contracts to 10 lots from one lot previously, starting from the night trading session on Monday.

The exchange increased the minimum order size to reduce retail investor participation and avoid price fluctuations caused by a large number of small orders, said Xuan Dongshuang, an analyst at research firm Sublime China Information.

China last year began an anti-dumping investigation into Canadian canola, but canola was not included among the tariffs announced on Saturday, just rapeseed meal and oil.

This likely leaves room for negotiation during trade talks, traders and analysts said.

The anti-dumping investigation on canola has reduced direct imports in the first quarter this year, with imported canola meal expected to make up over 50 per cent of total supply, China Grain Net said.

“However, once the investigation concludes, imports of Canadian rapeseed meal are likely to drop, leading to tighter supply,” it added.

— Reporting by Ella Cao, Lewis Jackson and Mei Mei Chu in Beijing

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The levies, announced by the commerce ministry and scheduled to take effect on March 20, match the 100 per cent and 25 per cent import duties Canada slapped on China-made electric vehicles and steel and aluminum products just over four months ago.

By excluding canola, which was one of Canada’s top exports to the world’s No.1 agricultural importer prior to China investigating it for anti-dumping last year, Beijing may be keeping the door open for trade talks.

Tariffs a warning shot

But the tariffs also serve as a warning shot, analysts say, with the Trump administration having signaled it could ease 25 per cent import levies the White House is threatening Canada and Mexico with if they apply the same extra 20 per cent duty he has slapped on Chinese goods over fentanyl flows.

“Canada’s measures seriously violate World Trade Organization rules, constitute a typical act of protectionism and are discriminatory measures that severely harm China’s legitimate rights and interests,” the commerce ministry said in a statement.

China will apply a 100 per cent tariff to just over C$1.44 billion of Canadian rapeseed oil, oil cakes and pea imports, and a 25 per cent duty on C$2.31 billion worth of Canadian aquatic products and pork.

“The timing may serve as a warning shot,” said Dan Wang, China director at Eurasia Group in Singapore. “By striking now, China reminds Canada of the cost of aligning too closely with American trade policy.”

“China’s delayed response (to Ottawa’s October tariffs) likely reflects both capacity constraints and strategic signaling,” she added. “The commerce ministry is stretched thin, juggling trade disputes with the U.S. and European Union.”

“Canada, a lower priority, had to wait its turn.”

The Canadian embassy in Beijing did not immediately respond to a Reuters request for comment.

Canola investigation ongoing

Then Prime Minister Justin Trudeau said in August that Ottawa was imposing the levies to counter what he called China’s intentional state-directed policy of over-capacity, following the lead of the United States and European Union, both of which have also applied import levies to Chinese-made EVs.

In response, China in September launched an anti-dumping investigation into Canadian canola imports. More than half of Canada’s canola exports go to China and the trade was worth $3.7 billion in 2023, according to the Canola Council of Canada.

“The investigation on Canadian canola is still ongoing. That canola was not included in the list of tariffs this time might also be a gesture to leave room for negotiations,” said Rosa Wang, an analyst with agricultural consultancy JCI.

Beijing could also be hoping that a change in government in Ottawa makes it more amenable. Canada’s next national election must be held by October 20.

China is Canada’s second-largest trading partner, trailing far behind the United States. Canada exported C$67.76 billion worth of goods to the world’s second-largest economy in 2024, according to Chinese customs data.

Important pork market

China is Canada’s third-most important pork export market. It takes products for which Canada does not have easy alternate markets, said Cam Dahl, General Manager of the Manitoba Pork Council.

“The things we export to China, heads for example, are parts of the animal that don’t have easy other markets,” he said. “We can’t take that container that’s going to China and just ship it to Mexico.”

China is Canada’s number-two market for canola, said Chris Davison, president and CEO of the Canola Council of Canada.

“The (tariff) levels that are being talked about here are prohibitive levels, for sure. … The impacts will be felt across the industry,” he said, adding that he would like to see financial support from the government.

Canadian government spokespersons did not immediately respond to requests for comment.

“To be honest I don’t understand why they are doing this one at all,” said Even Pay, agriculture analyst at Trivium China.

“I expect Beijing will use the election and change of leader as an opportunity to reset relations as they did with Australia,” she added.

China in 2020 introduced a series of tariffs, bans and other restrictions on key Australian exports, including barley, wine, beef, coal, lobster and timber in retaliation to Canberra calling for a COVID origins probe.

Beijing did not begin lifting the bans until 2023, one year after Australian Prime Minister Anthony Albanese ousted Scott Morrison, who had called for the inquiry.

—Additional reporting by Ella Cao, Anna Mehler Paperny and Ed White

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China’s winter wheat crop, usually planted in October and harvested around June, accounts for 90 per cent of its annual wheat production.

“The supply and demand remain loose for 2025-2026, surplus is expected to increase,” said Duan Chen, associate hedging manager with COFCO International, in a conference.

Why it matters: China is a key market for Canadian agricultural goods

Duan said the winter wheat area remains stable and a good crop is expected under normal weather. She did not give output estimates.

China, among the world’s top wheat importers, has reduced purchases this year after domestic production jumped to an all-time high of 140.1 million tons in 2024, a rise of 2.6 per cent from a year ago.

Higher supplies in the coming year may further cut China’s import demand, which shrunk 7.4 per cent last year to 11.18 million tons, adding pressure to benchmark Chicago wheat prices.

In addition to higher output, stagnant consumption has led to oversupply of wheat, which COFCO International expects to grow in the 2025/26 crop year, she said.

Milling demand for flour and food ingredients has stagnated due to demographic shifts, said Duan.

“Wheat surplus will be absorbed by the feed industry and government purchases,” she said.

The major wheat buyer has already delayed imports of up to 600,000 metric tons of mostly Australian wheat, Reuters reported in February.

Chinese importers at the conference told Reuters they have been increasingly cautious with purchases due to uncertainties surrounding a worsening trade war between Washington and Beijing.

“Currently, China’s demand for wheat, barley, and sorghum remains relatively weak, but there is hope for a recovery in the second quarter,” an Australian wheat and sorghum exporter said.

This week, China retaliated against fresh U.S. tariffs, announcing duty hikes covering around $21 billion worth of agricultural products.

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Shipments to China from key soybean supplier Brazil, top wheat exporter Australia and major pork supplier Europe, could surge as a trade war hots up between the world’s largest economies, industry officials and analysts said.

Why it matters: China is a key market for Canadian agricultural products

China retaliated swiftly on Tuesday against fresh U.S. duties, announcing hikes of 10 per cent and 15 per cent to import levies covering $21 billion worth of American agricultural goods.

“There will be rerouting of trade after China’s import tariffs on U.S. goods,” said Pan Chenjun, a senior analyst for animal protein at Rabobank in Hong Kong.

“The main products that will be impacted are pork offal and chicken feet. For pork, both muscle and offal, China will get more supplies from Brazil, Spain, the Netherlands and other EU countries.”

China is the largest market for U.S. farm exports, taking $29.25 billion worth of products in 2024, and any shift in trade flows could create opportunities for rival exporters.

That would continue a trend in which China has curbed dependence on U.S. agriculture since the trade war during President Donald Trump’s first term.

On Tuesday, Trump also imposed duties on goods from Canada and Mexico, which could hurt the $191-billion U.S. agricultural export industry.

Not enough chicken feet

China imported $16.26 billion worth of U.S. beef, pork and chicken, including offal in 2024, but in its counteroffensive, it has unveiled tariffs of 15 per cent on U.S. chicken products and 10 per cent on pork and beef.

European and South American meat shipments to China are expected to rise as a result, analysts said. While China initiated anti-dumping investigations into imports of European Union pork and dairy last year, sales have not been affected.

However, China’s reliance on the United States for chicken feet is likely to continue, as alternatives would be difficult to source fully and quickly, said Pan.

“Importers of chicken feet will just pay the duty and import from the United States in the meantime,” Pan said.

China is a key importer of U.S. chicken feet, pork ears and offal – items valued in its cuisine, but in little demand in the United States.

More Brazilian, Australian grains

About half of U.S. soybean exports go to China, even though the world’s No. 1 buyer has reduced its dependence on American oilseeds since Trump’s first term.

The latest tariff on U.S. soybeans heralds even greater reliance on Brazil and Argentina.

“From a soybean perspective, South American suppliers are likely to benefit. Suppliers of other oilseeds, like canola could also see a boost,” said Dennis Voznesenski, an analyst at Commonwealth Bank in Sydney.

China still depends on the United States for about two-thirds of its sorghum purchases, with Beijing’s 10 per cent duty on the animal feed grain likely to favour Australian farmers.

“Sorghum would be a clear winner. Probably barley would also stand to benefit,” said Rod Baker, an analyst at Australian Crop Forecasters in Perth. “Australia is harvesting quite a big crop this year.”

Higher duty on U.S. wheat is also expected to favour Australian suppliers, although China has reduced overall wheat imports in recent months amid ample local supplies.

— Additional reporting by Ella Cao in Beijing and Peter Hobson in Canberra

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A rise in demand from the world’s biggest pork consumer had propelled the expansion and modernization of hog farms but consumption took a downturn in recent years due to a weakening economy, leading to a surplus that has hammered prices.

Current demand in China is stable and unlikely to rise further, Zhu said in a seminar.

He said it is not advisable for companies to expand breeding sow capacity this year and should instead focus on cost reduction and improving the efficiency of breeding sows.

Beijing in 2024 lowered the national target for normal retention of breeding sows to 39 million from 41 million and issued regulations to control the nation’s pig production capacity.

In an annual rural work policy blueprint released on Sunday, known as the No. 1 document, the State Council said it will strictly enforce and supervise pig slaughter and regulate pork production capacity.

A rise in the number of breeding sows this year could continue to pressure hog prices throughout the year, Zhu said.

Zhu forecasts pork imports to further decline in 2025 from last year’s 1.07 million metric tons while demand for offal will remain unchanged.

China’s imports of pork meat and offal had already shrunk 15.7 per cent last year, a fourth consecutive annual decline, as the industry grappled with an oversupplied market.

Zhu expects the number of pigs slaughtered in 2025 to increase from 2024, while the average price of pigs will decrease by 10 per cent to 20 per cent.

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Brazil, the world’s biggest exporter of the oilseeds, has from Jan. 8 suspended shipments to China from Terra Roxa Comercio de Cereais, Olam Brasil and C.Vale Cooperativa Agroindustrial, one of the sources said.

On Jan. 14, Chinese customs suspended shipments from Cargill Agricola S A and ADM do Brasil, the source added.

There were concerns after some cargoes had been found with chemical contamination, pests or insects, sources said.

The parent firms of the affected entities did not immediately respond to requests for comment.

China’s General Administration of Customs did not respond to a request for comment.

“When we try to process clearance on customs’ website for soybeans shipped by these five companies, we are not able to proceed,” said the second source, a trader at a China-based soybean crusher.

It was not clear how long the suspension would last, although traders said they expect it to be short-term.

“It depends mainly on how quickly the Brazilian companies can provide proof that they found out what was wrong that led to these inconformities [sic] and provide a plan to fix that,” the first source said.

China buys more than 60 per cent of soybeans shipped worldwide. Brazil is its top supplier.

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Beijing in September launched a one-year investigation into canola imports from Canada after Ottawa imposed tariffs on Chinese-made electric vehicles, prompting importers fearing retaliatory anti-dumping duties to scale back purchases from Canada.

December shipments from Canada dropped 12 per cent from the same period the year before to 588,181 metric tons.

That was the first year-on-year decline in seven months and the smallest shipment volume since August.

More than half of Canada’s canola exports make their way to China, the world’s biggest oilseed importer.

China’s total canola imports rose in 2024 to 6.39 million tons compared to 5.49 million tons in 2023, customs data shows. Nearly all of that, at 6.13 million tons, arrived from Canada, amounting to $3.29 billion (C$4.71 billion).

Total Canadian canola exports have been strong since Aug. 1, with China accounting for over 75 per cent of shipments, Farm Credit Canada economists said.

“The export pace is running 10 weeks ahead of schedule,” they wrote in a  Jan. 15 report.

“Even if China slows down as expected, Canada will only need to export another 3 million tonnes of canola to reach Agriculture and Agri-Food Canada’s (AAFC’s) export target of 7.5 million tonnes in 2024/25. China’s anti-dumping probe is more likely to impact 2025/26 exports.”

—With files from Glacier FarmMedia

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