Canada hopeful of ending China canola dispute

OTTAWA (Reuters) - Canadian Agriculture Minister Gerry Ritz said on Tuesday that he's hopeful of resolving a dispute with China over its import restrictions on Canadian canola with blackleg disease.

"We're optimistic, we always are," Ritz told reporters in Ottawa.

Ritz would not say whether Canada might consider requesting a World Trade Organization dispute settlement panel, saying the government doesn't negotiate through the media.

Canadian officials remain in China seeking a resolution, he said.

"We're working through the issues on a piece by piece basis," Ritz said. "We've been exporting canola in a major way for some 10 years and this is the first time this issue has popped up.

"Of course, we have (blackleg) quietly under control here in this country, with the varieties of products and so forth, and we hope to convince the Chinese of that fact."

Blackleg is a disease caused by a fungus, which can kill the canola plant but poses no health risk to humans. It is commonly found on canola seed but is not a major threat to Canadian crops because of the resistant varieties grown.

China, Canada's top canola export market, is restricting Canadian and Australian canola with blackleg from the 2009-10 crop year to enter the country only via ports away from its rapeseed-growing areas. The move is expected to cut Canada's canola exports by an estimated 70 percent.

Canada is the world's top exporter of canola, a variant of rapeseed, which is crushed for its oil, used in cooking, and for its meal, which is used in livestock feed.

(Reporting by Louise Egan, writing by Rod Nickel; editing by Rob Wilson)