(Resource News International) –– The canola crush pace by western Canadian processors has picked up significantly despite the fact the Canadian dollar has been pushing towards parity with the U.S. greenback.
“A lot of the extra capacity that we have been anticipating has finally started to kick in,” Ron Frost, a grains/oilseed analyst with the Calgary-based Frost Forecasting Corp. and Agri-Trend Marketing.
A lot of the new domestic processing facilities, including older outlets that have expanded capacity, are starting to come on line, he said.
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“There’s been talk that the new Dreyfus plant in the Yorkton, Saskatchewan area is already working at 70 per cent of its full capacity,” Frost said.
Other new plants that have been built in Western Canada are also moving towards higher processing rates.
“The expansion and building of new plants will definitely result in the crush pace surpassing the level seen during the first half of the 2009-10 crop year,” Frost said. “You also have to remember that these companies don’t want those facilities sitting idle for too long of a time.”
The upward move in the value of the Canadian dollar may have hurt the profit margins of these processors to some degree, he said. “However, they wouldn’t be pushing capacity if there wasn’t money in it for them.”
Data from the Canadian Oilseed Processors Association for the week ended March 17 revealed that Canada’s canola processors had crushed 110,209 tonnes of canola.
“This was the third week in a row in which processors had topped the 100,000-tonne mark,” Frost said, noting more of these types of weeks were in the cards during the remainder of the crop year.
Cumulative 2009-10 canola crushings, based on COPA data for the week ended March 17, totalled 2.602 million tonnes, which surpasses the 2008-09 level for the first time this year of 2.598 million.
Agriculture and Agri-Food Canada expects the total 2009-10 canola crush to be in the 4.5 million-tonne range, which would compare with the 2008/09 level of 4.28 million.
