Canadian Canola Export: China on the Top
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For 2022-23, Canada seeded 8.7 million hectares (Mha) to Canola, a drop of 4% from the last crop year, resulting in a harvested area of 8.6 Mha. Yields averaged 2.11 tons per hectare (t/ha) versus the 2021-22’s drought-reduced of 1.54 t/ha. Production is estimated at 18.2 million tons (Mt) based on a Statistics Canada survey of 27,200 farmers. By major growing province, Saskatchewan produced 9.5 Mt of Canola, followed by Alberta at 5.6 Mt and Manitoba at 2.9 Mt. Total supply is estimated to be up from last year at 19.1 Mt, as the rise in production was partly offset by tight carry-in of stocks.
Carry-out stocks are down to 0.8 Mt for a stocks-to-use ratio of 4%. The oil content of Canadian Canola is averaging 42.8% to-date, based on a harvest survey of 1,866 samples, of which 93% graded Number 1. Canola prices are forecast to decline to $910/ton (t) track Vancouver. If realized, this would be the second-highest Canola price on record.
The 2022-23 outlook remains sensitive to several factors: (i) world macroeconomic outlook with a strong possibility of a recession, (ii) strength of world demand for vegetable oils, (iii) pace of crush and export buying, (iv) competition from European and Australian rapeseed, Indonesian palm oil and Brazilian and US soybeans, (v) late winter and early spring North American temperature and moisture conditions, and (vi) stability of supply chains stressed by the spread of COVID-19, particularly across China, and export shipments from the Black Sea region due to the ongoing Russian invasion of Ukraine.
For 2023-34, Canola area is forecast to rise slightly to 8.8 Mha as support from attractive prices is matched by similarly attractive prices for alternate crops such as wheat and peas. Production is forecast at 18.5 Mt, assuming an average abandonment of crop area and trend yields. Typical weather and growing conditions for the upcoming year are assumed. Total supplies are predicted to increase to 19.4 Mt as the rise in production is moderated by a slight decline in carry-in stocks.
Domestic crush and exports are forecast similar to 2022-23 at 9.5 Mt and 8.8 Mt, respectively, on support from solid world demand for oilseeds, vegetable oils, and protein meals. Regular feed, waste, and dockage are assumed as usual. Carry-out is forecast to rise slightly to 0.85 Mt versus 0.80 Mt for 2021-22 and the five-year average of 2.26 Mt. The simple average price for Canola, No. 1, track Vancouver is forecast at $875/t, down from $910/t for 2021-22 but above the five-year average of $739/t.
Canadian Canola Trade
Usage of Canadian Canola is forecast to return to more historically normal levels: exports are up 63% to 8.6 Mt, while domestic crush rose to 9.5 Mt versus 8.6 Mt last year. The pace of exports to November is 121% of last year based on the Canadian Grain Commission data compilation, with shipments to China and Mexico accounting for 80% of the Canola exported out of Canada by the end of November of the last year.
As per the AgFlow data, Canada’s total export volume was 3.7 million tons. China imported 2 million tons of Canola from Canada in 2022, followed by Mexico (0.7 million tons), France (196,400 tons), the United States (160,544 tons), Japan (150,550 tons), and Pakistan (132,000 tons). The following importers were Pakistan, Peru, Greece, Hong Kong, Singapore, Bangladesh, Panama, and South Korea. In January 2023, Canada shipped 0.7 million tons of Canola. The largest market was also China, with 0.5 million tons, followed by Mexico (117,900 tons), Saudi Arabia (60,000), and Japan (31,500 tons).
Other sources: AGRICULTURE CANADA
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