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China has cancelled major Canadian agribusiness Richardson International, based in Winnipeg, registration to ship canola to China, according to a document listing approved exporters posted on the website of the Chinese customs administration on March 1.

It wasn’t immediately clear why Richardson’s exports into China, the world’s top importer of canola, had been halted. Officials at China’s General Administration of Customs didn’t respond to requests for comment.

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But the move comes amid heightened tensions between the two countries in a dispute over trade and telecoms technology that has ensnared the chief financial officer of the world’s largest telecommunications equipment maker, Huawei Technologies Ltd, who faces U.S. criminal charges.

The March 1 customs document is a revised version of a notice first posted on Jan. 14. A note beside the entry for Richardson International in the latest document says, “Canola export registration already canceled”.

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A Canadian grain industry source with knowledge of the matter confirmed Richardson’s exports of canola to China had been halted. The person declined to be identified citing the sensitivity of the matter.

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A lasting block on Richardson’s canola exports would be a headache for Canada’s biggest grain handler and a potential blow for the Canadian economy as a whole.

Oilseeds like canola, fruit and grain are Canada’s biggest China export category, making up nearly 17 per cent of all exports in 2017, the latest annual data available, according to the Asia Pacific Foundation of Canada.

Spokespeople at Richardson’s headquarters in Winnipeg couldn’t be reached outside normal business hours.

Canada’s embassy in Beijing referred to Reuters’ request for comment to government officials in Ottawa.

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Canadian canola, Australian coal

In the escalating diplomatic row with Canada, China has detained two Canadians working in China, and on Monday accused one of them of stealing Chinese state secrets passed on to him by the other.

There had already been reports last month that Canadian canola shipments to China had been slow to clear customs amid the dispute.

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China buys some C$2.5 billion of Canadian canola per year, and a slower sales pace would be another hit to exporters, which also include Viterra and Cargill Ltd in a year when Prime Minister Justin Trudeau faces a tough race for re-election.

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The restriction on imports of canola from a country with which links have worsened echoes recent moves by Chinese customs to slow clearing of Australian coal imports.

Australia’s ties with China have deteriorated since 2017, when Canberra accused China of meddling in its domestic affairs.

Tensions rose again last month after Australia rescinded the visa of a prominent Chinese businessman, just months after barring Huawei from supplying equipment to its 5G broadband network.

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