OTTAWA (Reuters) – The Canadian government will boost an insurance program for canola exporters looking to find new buyers in light of trade tensions between Canada and China, sources with direct knowledge of the situation said on Wednesday.
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FILE PHOTO: Canola seeds ready for shipping off the Sterling Hilton farm are seen near Strathmore, Alberta, Canada, April 12, 2019. REUTERS/Todd Korol China, locked in a deepening dispute with Canada, has blocked imports of Canadian canola seed, depriving producers of their largest export market.
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Senior officials will announce on Thursday that Ottawa is providing additional credit insurance for grain companies selling canola abroad, said the sources, who requested anonymity because they were not authorized to speak to the media. Canada is the world’s biggest canola producer.
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The additional insurance would be provided by Export Development Canada.
A working group set up to aid the canola industry has been asking Ottawa for additional insurance to help alleviate risks such as non-payment that exporters looking for alternative markets might face, the sources said.
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Trade Minister Jim Carr and Agriculture Minister Marie Claude Bibeau are due to announce additional support for canola producers on Thursday, a spokeswoman for Carr said. She declined to give more details
Also present will be Carl Burlock, chief business officer of Export Development Canada
Ottawa has already bolstered a federally backed loan program for canola farmers
Last week, a Canadian trade delegation, led by Carr, traveled to Japan and South Korea to encourage more canola seed purchases. The trip coincided with the G20 trade ministers meeting in Japan
China has also suspended export permits from two Canadian pork plants and boosted inspections of pork shipments. Beijing is demanding Ottawa return a Chinese tech executive who is facing extradition to the United States
Traditionally, Export Development Canada’s involvement in the canola business has been relatively small because Canadian grain companies typically have strong and stable relations with their buyers
A spokeswoman for the agency said its level of support for the canola sector could vary, depending on the year and market conditions
Reporting by Kelsey Johnson; Editing by David Ljunggren and Peter Cooney