* Tongwei Co Ltd to boost buying up to C$240 mln/yr
* China banned Indian rapeseed meal last year
* Canada, China are top canola/rapeseed growers
(Updates canola trading, details)
By Rod Nickel
Feb 7 Chinese animal feed company Tongwei
Co Ltd will boost its buying of Canadian canola meal by up to
C$240 million ($242 million) annually by 2015, after China
banned meal from India late last year.
Canada's agriculture minister Gerry Ritz, who announced
Tongwei's plans on Tuesday during a visit to China, said
its purchases could be worth C$900 million over the next
Chinese oilseed traders have expected increased imports of
canola and canola meal from Canada, the top canola exporter,
after China halted purchases of Indian meal because some cargoes
were found contaminated with a dye used to brand grain sacks.
"This certainly puts some long-term stability in that
(industry)," said Brian Wittal, agriculture analyst at Pro Com
Marketing in Alberta. "If we can maintain and hold onto that
market, that will be the key thing. The big thing is whether
India can adjust and get back into (China)."
Tongwei's plans are a result of research funded by the
Canadian government to demonstrate the quality of canola meal
for Chinese dairy and aquaculture processing companies, Ritz
said in a statement from Chengdu, China.
The Grain Growers of Canada farm group, which is travelling
with Canadian officials in China, said Tongwei could buy up to 1
million tonnes of canola meal within five years for aquaculture.
The Canola Council of Canada, also on the trip, pegged the value
of Tongwei's plans at up to $300 million, including C$60
million worth of canola meal it already buys annually.
ICE Canada canola futures finished higher on
Tuesday, even as U.S. grains dipped, and a trader said the news
gave prices a lift.
Canola is mainly crushed for its oil for use in salad
dressings, margarine and other food products, as well as in
biodiesel. The meal is used mainly to feed animals, especially
China has set a goal of doubling milk production by 2015.
Canola trade between the two countries - the top two
producers of canola/rapeseed - has at times been strained due to
Chinese restrictions on which of its ports can accept Canadian
canola with the fungal disease blackleg.
China was not a significant buyer of Canadian canola meal
Boosting trade of canola meal with China allows Canada to
diversify its export markets. The United States is by far the
biggest importer of Canadian canola meal, but in recent years
U.S. regulators refused access to meal from some Canadian plants
due to concerns about salmonella bacteria.
That dispute has since been resolved.
Canadian Prime Minister Stephen Harper is touring China this
week to discuss crude oil exports and other issues, including
(Reporting by Rod Nickel in Winnipeg; Editing by Marguerita
Choy, Bob Burgdorfer and Lisa Shumaker)