Canola Exports Moving Ahead At Steady Pace

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Canadian canola exports continue to move forward at a steady pace, despite ongoing problems exporting to China. However, if the situation with China is not resolved Canada’s overall export program may still end up below the previous year’s level.

According to the latest Canadian Grain Commission data for the week ended Jan. 17, Canada had exported 3.254 million tonnes of canola during the crop year to date. That is exactly in line with the exports at the same point the previous year.

“There seems to be pretty steady demand,” said Lach Coburn, West Coast manager with Cargill Ltd. Mexico was taking more canola than had originally been anticipated, he said, while more vessels were also destined for Dubai.

The business to Dubai was likely “toll crushing” with the oil destined for China, said Coburn.

While China may be bringing in canola oil via Dubai, the country has not imported any canola seed from Canada since new import restrictions went into effect on Nov. 15.

Canada exported 2.8 million tonnes of canola to China in 2008-09, and the country had been poised to be another large customer in 2009-10.

China is now only allowing canola shipments infected with the common blackleg fungus into a few select ports, far away from the country’s own canola-growing and processing areas. However, import permits are required to move canola into those ports, and none have been issued so far, according to export officials.

Coburn said there was still no movement on resolving the China issue, commenting that “we’re in the same spot we were eight weeks ago.”

Without a return of Chinese buying, Coburn said canola exports could eventually fall off of the previous year’s pace.

“A year ago we had a pretty busy spring that took us over the top, and I’m not sure that will carry forward this year as well,” said Coburn. Some of the largest months for exports in 2008-09 were in the later half of the crop year, with China a major part of that activity.

Canada exported a total of 5.213 million tonnes of canola in 2008-09. Agriculture and Agri-Food Canada’s market analysis division currently forecasts exports in 2009-10 of 4.733 million tonnes.

About the author

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Phil Franz-Warkentin writes for MarketsFarm specializing in grain and commodity market reporting.

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