Canadian canola exports are lacklustre, due in large part to China's absence from the market. However, domestic crush is robust and the US is scooping up lots of Canadian canola oil.
Canada was able to ship 255,536 tonnes of canola in September. This was up from last year but well below the five-year average. Perhaps the most interesting aspect is that Chinese statistics indicate that China imported zero from Canada in September. It is very rare, politics notwithstanding, for Canada to be blanked into China in any month.
Agriculture and Agri-Food Canada (AAFC) is forecasting Canadian canola exports (to all destinations) in 2023-24 at 7.7 million tonnes. The current pace through the first two months equates to just over 4 million tonnes. Indications are that export demand remains a distant second to demand from processors across Canada.
Crush off to a hot start.
In contrast to exports, crush is off to a hot start. August saw a near-record for that monthof 829,490 tonnes crushed, according to Statistics Canada monthly data. Then in September, the crush set a record for that month of 922,108 tonnes - more than 100,000 tonnes above the previous best September crush total.
For 2023-24, AAFC forecasts a domestic crush of 10 million tonnes. Accordingly, after just two months of the marketing year, Canada has crushed 17.5% of the AAFC forecast. Canada is on pace to crush 10.5 million tonnes.
US demand for canola oil has surged.
Big US imports of Canadian canola oil are linked to the increasing presence of biofuel demand, including renewable diesel and renewable jet fuel. More plants are coming online and there is a strong probability that in a few years, US demand could utilize all of Canada’s canola oil production.
Meanwhile, China’s imports of Canadian canola oil have plummeted. This is as likely to be due to a lack of availability from Canada due to increased US demand as it is to be from any actual decline in Chinese vegoil consumption. Given current government support for biodiesel/renewable energy plus the direct involvement of major oil companies in renewable fuel production, this trend is going to expand in the foreseeable future.
