(Resource News International) — Canada’s canola export projections
for the 2007-08 crop year are slowly being downsized,
but strong domestic processor demand is expected to help limit
the impact on Canada’s ending stocks picture.
Strength in the Canadian dollar, along with high ocean
freight rates were linked by industry sources to the downsizing of Canada’s canola
export program.
At the start of 2007-08, there had been ideas
that strong demand and available supply would result in Canada
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In the past week, the Hamburg-based newsletter Oil World
estimated Canada’s canola export program at 5.860 million tonnes, down from a forecast of six million made by the
newsletter in November 2007.
“Canada’s canola exports to date have been a bit
disappointing,” said Chris Beckman, an oilseed analyst with the market
analysis branch of Agriculture and Agri-Food Canada in Winnipeg.
Beckman had been expecting Canada’s canola exports in
2007-08 to hit 5.3 million tonnes, but acknowledged he was
considering lowering that forecast to reflect the slow sales to
date. Canada exported 5.477 million tonnes of canola during
2006-07.
Mike Jubinville, an analyst with the farmer advisory
service ProFarmer Canada, agreed canola sales to date have
“I was expecting canola exports from Canada to at least hit
5.4 million tonnes, but that may no longer be a very realistic
target,” he said.
Tony Tryhuk, vice-president and manager of commodity trading
for RBC Dominion Securities, was forecasting Canada’s 2007-08
canola exports at only 4.8 million tonnes.
“In order for exports to have hit the earlier projected
levels, Canada would have needed to be moving at least 500,000
tonnes of canola on a monthly basis,” Tryhuk said. “That just has
not been the case.”
Tryhuk also blamed transportation logistics within Canada
for the poor canola export pace.
With the appreciation of the Canadian
dollar and the high ocean freight rates, Tryhuk said, only countries such as
Japan and, to some extent, Mexico have shown any interest in
He noted price-sensitive countries such as China and
Pakistan just have not shown any sustained interest in buying
Canadian canola.
Jubinville pointed out that the odds of China picking up
canola in the near term were also limited, given that the country
begins harvesting its own rapeseed crop in April.
Logistical factors will also curtail the ability of Canada
to make up canola sales later in the crop year, Jubinville said.
“There just is not as much demand come April, May, June or
July, as other oilseed crops are available,” he said.
Domestic crush
Although Canada’s canola export program will be lower than
expected, the country’s domestic processors were expected to pick
up some of the slack.
“I’m expecting Canada’s domestic crush in 2007-08 to hit a
record four million tonnes,” Jubinville said. The previous record
was established in 2006-07 when processors crushed 3.579 million
tonnes of canola.
Beckman projected Canada’s 2007-08 canola crush at 3.75
million tonnes in mid-December, but admitted there was room for
that number to be adjusted upward.
Tryhuk also estimated Canada’s canola crush in 2007-08 at
four million tonnes.
“Between the expansion that is ongoing in Canada’s domestic
processing sector and the new crushing capacity that is about to
come on line, there is easily room for growth in this sector,”
Jubinville said.
