China widens ban on Canadian canola imports to second firm, Viterra

By Dominique Patton and Julie Gordon

BEIJING/OTTAWA (Reuters) - China expanded its ban on Canadian canola seed imports on Tuesday to include shipments from Viterra Inc, the latest development in a wider trade dispute between the two countries.

Viterra is the second canola exporter to have its registration cancelled, after Beijing halted shipments from top exporter Richardson International earlier this month.

An industry group said last week that Chinese importers have stopped buying any oilseed from Canada, though Chinese imports of Canadian canola oil and meal have not been impacted.

Canadian Prime Minister Justin Trudeau told reporters on Tuesday that his government was trying to resolve the issue and considering sending a high-level delegation to China to address the country's safety concerns.

"We are taking this very seriously," he said in Winnipeg, Manitoba, noting that Canada's relationship with China has been fraught in recent months.

"We have seen a certain amount of challenges in our relationship with China over diplomatic issues," he said.

Canada and China have been locked in a trade and political dispute since the chief financial officer of Chinese telecom giant Huawei Technologies Co Ltd was arrested in Vancouver late last year on a U.S. extradition request.

The ban on Viterra and its related companies was announced by China's General Administration of Customs on its website and was effective immediately. Viterra is owned by Glencore Plc's agricultural arm.

Chinese customs said in a statement the ports of Dalian and Nanning had once again detected several pests in samples taken from cargoes shipped by Viterra.

In order to prevent the introduction of harmful organisms, it cancelled the firm's export registration, it said, adding that it will continue to strengthen inspections on all canola imports.

Viterra is working with the Canadian government and the Canola Council to gather more information, a spokesman said. Export products are tested to ensure they meet specific import standards, the spokesman said in a statement.

A spokesman for the Canola Council of Canada said the industry group is confident in the quality of Canadian canola seed exports, noting no other global customers have expressed concerns.

"Today (the Chinese) are alleging another new pest of concern. We are quite perplexed. How can the quality of our canola suddenly change?" said Brian Innes, vice president of public affairs with the Canola Council.

China accounts for about 40 percent of Canada's canola seed, oil and meal exports, according to the Canola Council, with seed exports to China worth some C$2.7 billion ($2 billion) a year.

(Reporting by Dominique Patton; editing by Dan Grebler and Lisa Shumamker)