China caused a great deal of turmoil in the canola market on Sept. 3, leading prices to tumble on the Intercontinental Exchange. To senior market analyst Mike Jubinville of MarketsFarm, China dramatically changed canola’s outlook in fell swoop.
The Chinese government announced that it was launching an investigation into alleged canola dumping by Canada. This came about week after the Canadian government said it was hiking tariffs on imports of Chinese electric vehicles by 100 per cent and increasing levies on steel and aluminum from China by 25 per cent.
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“I thought there were going to be some pricing opportunities in canola until China knocked the pieces off of the board,” Jubinville commented, noting there had been a scenario unfolding that could have seen a tightening of canola supplies.
That included Canada’s canola harvest for this year coming in below the 19.5 million tonnes forecast by Statistics Canada on Aug. 28. Jubinville added the crop reports from the Prairie Provinces have said yields are coming in lighter than expected. In fact, he went as far as to project the harvest amounting to less than 19 million tonnes.
Jubinville said there had been some estimates that projected canola exports to China for 2024/25 at five million tonnes. That would be up a little from the 4.9 million this year, according to the latest Canadian Grain Commission data.
Any loss in sales to China, he suggested, could be redirected towards Japan and Mexico – Canada’s next two largest canola customers. As well as to the European Union, which is facing reduced rapeseed production due to unfavourable weather earlier this growing season.
The August world oilseed report from the United States Department of Agriculture estimated the EU’s rapeseed output for 2024/25 at 18.9 million tonnes, down from 20 million the previous year. Also, the USDA cut China’s rapeseed production to 15.6 million tonnes for this year from 16.3 million last year.
One element to this sudden canola conundrum in Canada Jubinville pointed out has been the reaction by the federal government. In particular, the feds paying lip service to canola growers, but no indication so far of any kind of financial support for them.
“You have sideswiped the ag industry. You’re protecting the auto industry at the expense of canola,” said Jubinville.
He explained that when Australia and China had a trade dispute over the former’s barley that it took about 18 months to resolve, with tariffs levied on any Australian barley imports.
“Ultimately I think this [canola] tariff is coming and it will take years to resolve,” Jubinville stated.
