(Resource News International) — Canadian canola exports continue at a record pace, cutting into the country’s massive supplies, according to industry participants. While ending stocks will still be large, they may not be as big as originally thought.
Adrian Man of Winnipeg’s Richardson International said the canola export program was running strong, and should remain that way through February and into March.
China is the major buyer for the time being, according to Man. He thought Chinese demand would remain strong as long as domestic Chinese prices are high and Canadian canola prices stay competitive with soybeans.
Canadian canola exports to China during the current crop year of 1.5 million to 1.8 million tons would be a reasonable forecast, Man said, though he added that with China expected to import 30 million tonnes of soybeans, a few more shipments of canola would not be out of the question.
Man noted that while Canadian canola supplies are at record levels, the prices are still relatively good and farmers have been making the sales needed to meet the export demand. He expected farmers would seed similar acres to canola in 2009-10, and was optimistic that Canada would continue to find more markets for the commodity.
Canadian farmers grew a record 12.643 million-tonne canola crop in 2008-09, according to Statistics Canada estimates. Factoring in the carryover from the previous year, total supplies were estimated at 14.359 million tonnes, which compares with 11.527 million in 2007-08.
Canada had exported 3.129 million tonnes of canola as of Jan. 11, according to Canadian Grain Commission data, which compares with 2.415 million tonnes at the same point the previous year. Domestic usage is also ahead of the year ago rate, at 2.007 million tonnes as of Jan. 11, up from 1.918 million at the same point in 2008.
Canadian canola ending stocks for 2008-09 are currently being forecast at 3.000 million tonnes by Agriculture and Agri-Food Canada, which would be well above the 1.541 million-tonne carryout from the previous year.
The government’s ending stocks estimate is based on projected exports of 6.3 million tonnes. However, given the current pace, Mike Jubinville of ProFarmer Canada thought canola exports could come in as high as 7.3 million to 7.4 million tonnes in 2008-09, with China, Japan, the U.S. and Mexico all major customers.
Even working with such a large export forecast, Jubinville’s figures were still pointing toward record ending stocks in the 2.2 million to 2.3 million tonne range.
“No matter how you slice this, we just won’t be short on canola next year,” said Jubinville. However, he agreed with Man that canola acres were unlikely to decline in 2009-10, as the crop pencils out well against most other options.