May 18, 2009

Canadian canola exports reached a record of more than 900,000 tonnes in April, but such a break-neck pace isn't expected to continue through the end of the crop year, according to senior trade sources.

 

"If you include shipments from all of the ports, Canadian canola seed shipments reached roughly 913,000 tonnes in April, with 860,000 tonnes leaving off the West Coast alone," said a senior trade source from a major Canadian agriculture company.

 

That compares to an average monthly shipment pace of 400,000 to 500,000 tonnes and the previous record, set in October 2008, of nearly 700,000 tonnes, he said.

 

While the source expects canola shipments to remain strong for the last three months of the 2008-09 (August-July) crop year, the tonnage will likely slip "a tad," he said.

 

"If you look at the vessel line-up out of Vancouver, there are seven boats already lined up for China, but we probably won't see that in June and July," the source said.

 

The reason is partly because China begins to harvest its own rapeseed crop in May and partly due to logistical constraints within Canada. Transport capacity through June and July is quite full, and there is not a lot of capacity left after that, the source said.

 

"There are definitely cargoes on the books to China for that period, but I don't think that we'll see as many. We might see some more Mexican business, and possibly something to Dubai, because I don't think there is anything lined up for Dubai in May," the source said.

 

The canola carry-out in Canada this year could be a lot smaller than expected even last month given the way exporters have been drawing down stocks, he added.

 

Lach Coburn, west coast manager for Cargill Ltd., agreed that another record month like April is unlikely.

 

"We're still going to have a pretty good shipment in May, June and July, but it will be hard to hold that pace. To hold that pace, you would take the canola carry-out pretty quickly," Coburn said.

 

Coburn said April's record pace of over 900,000 tonnes deserves applause. Logistically, things moved very well from a number of major Canadian ports due to less congestion from other commodities.

 

Also, "the canola yields [in Canada] last year were tremendous, and it was great that the market was there to take it," Coburn said.