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Mumbai, April 22 (Commoditiescontrol):According to current estimates, Canadian canola supplies for the 2022-23 season are expected to increase by 22% to 19.1 million tonnes (Mt) compared to the previous year. Despite the drought experienced in 2021-22, canola production in Canada is projected to recover, with yields returning to near-normal levels of 2.11 tonnes per hectare (t/ha). The country seeded 8.7 million hectares (Mha) to canola, harvesting 8.6 Mha, resulting in a production estimate of 18.2 Mt.
The usage of canola is expected to return to historically normal levels, with exports projected to increase by 60% to 8.4 Mt, while food and industrial use is set to rise to 9.5 Mt compared to the 8.6 Mt processed in the previous year. These estimates are supported by the Canadian Grain Commission statistics, which indicate that current exports and domestic disappearance through licensed grain handling facilities have risen by 51% and 11%, respectively, from the same time last year.
Canola prices for the 2022-23 season are forecast at $850/tonne (t), track Vancouver, which is lower than the previous year's price of $1,075/t but still higher than the five-year average of $665/t. The carry-out stocks are projected to increase to 1.0 Mt, with a stocks-to-use ratio of 6%, supported by strong global demand.
For the remainder of the 2022-23 season, several factors are likely to influence the canola market, including the pace of exports and crusher buying, early spring weather forecasts in Canada and the US, South American soybean export pace, Chinese oilseed and co-product import demand, and the pace of expansion in the renewable fuel sector.
For the 2023-24 season, the canola area is forecast to rise slightly to 8.8 Mha, driven by favourable prices. Production is projected to reach 18.5 Mt, assuming normal abandonment of crop area and trend yields. However, current moisture conditions are drier than normal across the middle of Saskatchewan. Normal to above-normal spring rains are required across most Western Canada to recharge soil moisture before spring seeding. Total supplies are forecast to rise marginally to 19.6 Mt, with looser carry-in stocks supplementing the rise in production.
Domestic crush and exports are projected to remain similar to the 2022-23 season, with domestic crush forecast at 9.5 Mt and exports at 8.8 Mt, reflecting sustained strong world demand for oilseeds, vegetable oils, and protein meals. However, suppose any announced or under-construction crush plants become operational in the upcoming crop year. In that case, domestic crush is likely to exceed the current forecast by 0.5 Mt to 1.0 Mt, while exports may decline similarly.
Carry-out stocks are forecast to rise slightly to 1.1 Mt compared to 1.0 Mt for 2022-23, but still lower than the five-year average of 2.3 Mt. The simple average price for canola, No. 1, track Vancouver, is expected to be $820/t, which is lower than the forecasted price of $850/t for 2022-23 but higher than the five-year average of $727/t.
(By Commodities Control Bureau: 09820130172)
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