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Canada's 2022-23 Canola exports pegged higher by 71% y/y to 8.8 million tonnes

21 Jun 2022 2:09 pm
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NEW DELHI, June 21 (Commoditiescontrol) - Canada's 2022-23 canola production is pegged higher by 71 percent from 5.15 million tonnes (Mt) in 2021-22 to 8.8 million tonnes, according to AAFC’s latest outlook report, published on June 20.

For 2021-22, canola supplies tightened sharply, falling 37% to 14.5 million tonnes (Mt), on a 49% drop in carry-in stocks and a 35% decline in production due to drought.

Demand for Canadian canola remains firm on a strong world oilseed crush and high prices for competing oilseeds, vegetable oils and protein meals. Disruption of Black Sea exports of sunflowerseed oil due to the Russian invasion of Ukraine is tightening world supplies and supporting world prices.

Domestically, processing of canola is estimated to fall to 8.3 Mt, a drop of 20% from last year, while exports are expected to fall by 51% to 5.2 Mt, as commercial buyers outbid exporters for the tight supplies. For the crop year, the major importers of Canadian canola to-date are China, Japan, Mexico and the European Union.

Carry-out stocks are forecast to fall by 77% from last year, to 0.40 Mt, for a stock-to-use ratio of 3% versus 8% in 2020-21 and the 5-year average of 13%. For the crop year, Canadian canola prices are estimated at $1,100/t vs $730/t last year and the 5- year average of $556/t.

For 2022-23, canola seeded area is expected to decrease by 7% to 8.5 million hectares (Mha) based on Statistics Canada’s Seeding Intentions Survey, as farmers shift into cereals following last summer’s drought. Harvested area is forecast at 8.4 Mha while yields are forecast at 2.14 t/ha versus the 1.4 t/ha achieved last year.

Canola seeding is running 3 to 4 weeks behind normal across the eastern half of the prairie provinces following several large storms which resulted in overland flooding in many regions. Currently, conditions are dry across southern Alberta and excessively wet in eastern Saskatchewan and across Manitoba. A period of warm and dry weather is required to allow farmers to finish seeding and to speed crop development.

Production is forecast at 17.9 Mt, the 8th highest level on record. By province, Saskatchewan is forecast to grow 9.4 Mt of canola, Alberta 5.4 Mt and Manitoba 3.0 Mt. Total supply is forecast to rise sharply from last year to 18.4 Mt as the increase in production is moderated by tight carry-in.

Usage of Canadian canola is forecast to recover with exports up 71% to 8.8 Mt while domestic crush rises to 9.0 Mt versus 8.3 Mt last year. Carry-out stocks are up 25% to 0.5 Mt for a stocks-to-use ratio of 3%. Canola prices are forecast to decline to $1000/t track Vancouver, a drop of about 10% from the record highs in 2021-22. If realized, this would be the second highest canola price on record.

The 2022-23 outlook remains sensitive to several key factors: (i) the disruption in Ukrainian oilseed production and exports due to the Russian invasion, (ii) the rate of growth in the renewable diesel sector, (iii) world output of alternate oilseed crops – this outlook assumes a minimal shift in seeded areas, normal temperatures and moisture, and normal yields, (iv) strength of Chinese buying – China is the world’s largest importer of oilseeds and its buying decisions can and do affect canola prices, (v) policy shifts in Indonesia as the country temporarily restricts palm oil exports to suppress domestic prices.

(By Commoditiescontrol Bureau)


       
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