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OTTAWA, April 3 (Reuters) - China has not escalated a dispute with Canada over the export of canola seeds and comments by the Canadian farm minister on the matter have been misunderstood, an agriculture ministry official said on Wednesday.
China - embroiled in a major diplomatic dispute with Ottawa - has blocked imports from two major Canadian exporters and on Tuesday Agriculture Minister Marie-Claude Bibeau said a third company had received a Chinese notice of non-compliance.
"It was a misunderstanding ... in January, three Canadian companies received notices of non-compliance regarding shipments of canola seed from Canada to China," said the official.
"In March, China suspended the registration of two of the companies. They have not suspended the registration of the third company ... it is nothing new and there has been no escalation," said the official, who declined to be identified given the sensitivity of the situation.
Early last month, China cited the discovery of pests as the reason for blocking shipments of canola seed from Richardson International. Shortly afterward, it expanded the ban to a second major exporter, Viterra Inc.
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.
($1 = 1.3318 Canadian dollars) (Reporting by David Ljunggren Editing by Alistair Bell)