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Canada's 2021-22 Canola Production May Fall 20% YoY to 15 Million Tonnes

27 Aug 2021 1:43 pm
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NEW DELHI, Aug 27 (Commoditiescontrol) - Canada's 2021-22 canola production may fall to 15 million tonnes (Mt), down 20 percent from 2020-21, according to AAFC’s latest outlook report, published on August 20.

For 2020-21, ending stocks are estimated at 0.7 Mt, down sharply from the carry-in of 3.1 Mt as Canada marketed a record 21.3 Mt of canola during the crop year. Final data on canola crush and exports is still being compiled by Statistics Canada but preliminary estimates indicate Canada crushed a record volume of canola at 10.2 Mt and exported about 10.9 Mt – the second highest pace on record. The year-end, simple-average price for canola, track Vancouver was $730/t, up sharply from $484/t for 2019-20 and the 5 year average of $513/t.

For 2021-22, seeded area in Canada increased by 8%, to a three year high of 9.10 million hectares, (Mha), while harvested area is estimated at 9.04 Mha, assuming historically normal abandonment. Sharply below normal yields are forecast based on adverse growing conditions experienced during the spring and summer including: low spring soil moisture, regional frosts followed by a prairie-wide heat-wave, insect and disease outbreaks, and a lack of rain.

AAFC estimates canola yields 70% of the 5-year average at 1.66 t/ha. By comparison, 2020-21 yields were 2.25 t/ha, the 5 year average is 2.16 t/ha and the yields for the drought year of 2002-03 were 1.25 t/ha. AAFC continues to monitor the drought situation closely and will update its yield estimates in the September release of the Outlook based on data provided through Statistic Canada’s Field Crop Reporting Series.

Canola production is estimated at a ten year low of 15.0 Mt, versus the 18.7 Mt produced in 2020-21 and the 5 year average of 20.0 Mt. Canola production was last this low in 2012-13 when output fell to 13.9 Mt. Canadian supplies are estimated at 15.9 Mt, again the lowest since the 2012-13 crop year, on a combination of very tight carry-in stocks and reduced output. Canola supplies were 22.0 Mt in 2020-21 and the 5 year average is 22.9 Mt.

World demand is expected to remain strong for the remainder of the crop year, however exports are forecast to fall 36%, to 7.0 Mt on tight Canadian supplies. Similarly, domestic crush is expected to decline from last year’s record to 8.0 Mt as the canola sector as a whole is forced to ration supplies.

Ending stocks are forecast to remain unchanged at a very tight 0.7 Mt, while prices are forecast at a record $950/t vs $730/t last year and the 5 year average of $512/t. This outlook contains a significantly higher-than normal degree of uncertainty given the growth in world vegetable oil demand and the adverse growing conditions across western Canada over the past year. Price volatility for canola has declined in recent weeks but remains vulnerable to a sharp correction in the event of a demand or supply shock.

(By Commoditiescontrol Bureau)

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