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Canada's 2021-22 Canola Exports may Fall 48% y/y to 5.5 million tonnes

20 Nov 2021 5:32 pm
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NEW DELHI, Nov 20 (Commoditiescontrol) - Canada's 2021-22 canola exports may fall to 5.5 million tonnes (Mt), down 48 percent from 2020-21, according to AAFC’s latest outlook report, published on November 19.

For 2021-22, production is estimated at a 13-year low of 12.8 Mt on seeded and harvested areas of 9.1 Mha and 9.0 Mha, respectively. Harvest wrapped up across western Canada on widespread warm and dry weather, with some combining delayed by green undergrowth. As of early November, western Canada has experienced only light frosts and forecasts call for above normal temperatures for the remainder of the fall.

The grade distribution for canola is near normal with the Canadian Grain Commission’s Harvest Sample Survey reporting 91% of the crop grading Number 1, while canola oil content is significantly lower than normal at an average 41.9%, versus 44.1% last year and the 5-year average of 44.2%. The modern day record oil content for canola was set in 2011 at 45.2%. The distribution of canola oil content is relatively even across all grades and significantly higher for canola grown in eastern Canada compared to that grown across the western provinces.

Canadian supplies are estimated at 14.7 Mt, the lowest since the 2008-09 crop year, on a combination of tight carry-in stocks, reduced output and modest imports. Canola supplies were 23.0 Mt in 2020-21 and the 5-year average is 23.1 Mt.

Canadian exports are forecast to fall 48% from last year to 5.5 Mt on tight Canadian supplies despite strong world demand.

Domestic crush is forecast to decline from last year’s record of 10.4 Mt to 8.5 Mt as supplies are rationed among users.

Ending stocks are forecast to tighten to 0.50 Mt, with 0.3 Mt in commercial position and 0.2 Mt stored on farm, for a stocks-to-use ratio of 4%.

Tight canola stocks combined with strong US soyoil prices are forecast to support a canola price of $1,000/t for 2021-22, compared to $730/t in 2020-21 and the 5-year average of $556/t.

This outlook contains higher-than normal uncertainty given the expansion in world vegetable oil consumption and the adverse growing conditions experienced across various growing regions over the past year.

Volatility for canola prices is expected to remain high with the market vulnerable to sharp corrections from either demand or supply shocks.

(By Commoditiescontrol Bureau)

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