Chinese demand for canola to remain strong

Chinese demand for Canadian canola will remain strong during the upcoming 2012-13 crop year, according to a government analyst.

There is the potential for Canada’s shipments to China to rise further but that will depend on how successful recent visits by Canadian officials were in removing restrictions imposed on Canadian canola imports over blackleg concerns.

"Canada will export roughly 2.5 million metric tons of canola to China during the upcoming 2012-13 season," said Chris Beckman, an oilseed analyst with the market analysis division of Agriculture and Agri-Food Canada in Winnipeg.

Canadian canola exports to China in 2011-12 were also seen hitting 2.5 million tonnes. During the 2010-11 season, China purchased 2.336 million tonnes of Canadian canola, according to data from the Canadian Grain Commission.

China’s purchases of Canadian canola were linked in part to the country’s rising demand from consumers for canola oil and in part to Europe’s diminished rapeseed harvest.

Australia would normally export its canola to China, but because of Europe’s lower rapeseed output due to weather issues, more of those supplies will be making their way to Europe instead because of Australia’s non-GMO status.

That in turn will provide opportunities for Canada in China, Beckman said.

Mike Jubinville, an analyst with ProFarmer Canada in Winnipeg, agreed Canada could certainly export 2.5 million tons of canola to China in the upcoming crop year, but there was a chance the amount could increase to three million tonnes and up if the Chinese government was to remove its blackleg import restrictions on Canadian canola.

Canadian government and trade officials have made frequent visits to China, and the Canola Council of Canada is currently in the process of wrapping up a joint blackleg research program to address China’s concerns about the spread of the fungal disease in its domestic growing areas.

China has restricted imports of Canadian canola with blackleg to a handful of crushing plants since late 2009. Those limited concessions are temporary exceptions to an outright ban, and are up for annual renewal.

Chinese canola importers believe their government’s quarantine authorities will partly lift restrictions and allow imports of Canadian canola by crushers in major rapeseed-growing areas by this summer.

Total program

Meanwhile, Canada’s total canola export program in 2012-13 was expected to decline fractionally from the 2011-12 expectation, Beckman said.

He forecast Canada’s 2012-13 canola export program at 8.35 million tonnes, which compares with the 8.4 million forecast for 2011-12.

Japan’s demand for Canadian canola was expected to remain steady at 2.200 million tonnes in 2012-13 in comparison to 2011-12, while Mexico’s purchases also hold steady at 1.5 million.

U.S. demand for Canadian canola was also expected to remain steady in 2012-13 from the 2011-12 level of 550,000 tonnes. Canola exports to the European Union in 2012-13 and in 2011-12 were pegged at 500,000 tonnes while shipments to Pakistan also hold steady at 600,000.

Shipments of Canadian canola to the United Arab Emirates in both 2012-13 and 2011-12 were pegged by Beckman at 450,000 tonnes.

The only difference in export destinations for Canada’s canola was for smaller markets described as "others."

In 2011-12, other markets were forecast to take 100,000 tonnes of Canadian canola; no such exports were projected for 2012-13, Beckman said.

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