New-crop canola supplies currently finding their way into the commercial pipeline in western Canada are helping set the stage for another record export program for the commodity.
"It’s expected to be fairly busy, and I don’t see anything that would change that," said Lach Coburn, west coast manager of shipping with Cargill Ltd. in Vancouver on the pace of canola exports this year. "It’s just a matter of execution now," he added.
"It will be a big export program," seconded Adrian Man of Richardson International in Winnipeg. He said the demand was there for even more exports, but competition from the equally strong domestic crush sector and tight supplies may limit the actual business.
Canada exported over 8.5 million tonnes of canola in 2011-12, according to Canadian Grain Commission data. The export pace in the first month of the new crop year is slightly behind the year-ago level, but there is still a long marketing year ahead.
Coburn said tight available supplies ahead of the harvest had caused the export pace to slow down over the summer months, but with the harvest well underway and railcars being loaded in Western Canada activity is picking up.
If the pipeline can be kept full, he said, record exports are possible once again in 2012-13. "You don’t want to run the pipeline dry, because every month you lose shipping is shipping you don’t get back," he said.
Traditional customers, including China, Japan, Mexico, Dubai, Pakistan and Bangladesh, are the major destinations for canola this fall, said the two exporters.
Yield and quality of this year’s canola crop are still up in the air, and Coburn said a key factor for the buyers will be the oil content.
Another unknown in 2012, with the end of the Canadian Wheat Board’s single desk for marketing wheat, is how the recently opened wheat market will impact the flow of grain and oilseeds from producers.
Coburn and Man said an adjustment period was to be expected, but were confident the new marketing realities would sort themselves out over the next few weeks.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.