May 6, 2009

                           

 

Strong demand could push Canadian canola exports to China in 2008-09 to 2.5 million tonnes, with more than two million tonnes of export sales already on the books, according the Canola Council of Canada.

 

Data as of the end of March 2009 show 1.47 million tonnes of Canadian canola seed exported to China, up from 485,000 tonnes as of the same date last year, said David Hickling, CCC's vice president of canola utilisation.

 

"We're already nearly a million tonnes over last year and we know from what our industry members have said that over two million tons of export sales are already on the books for the crop year," he said.

 

"I'm even hearing estimates as high as three million. At this stage, that is more of a prediction but I would say that somewhere between two million and three million, around 2.5 million, will be exported to China," Hickling said.

 

In the 2007-08 crop year, Canada exported 659,300 tonnes of seed to China, according to CCC's Web site.

 

China is building up its vegetable-oil reserves and crush margins for canola, relative to soy, are good in China. Those two things have been positive for Canadian seed sales, he said.

 

On the oil side, data as of the end of January show exports have been "virtually nothing," Hickling said. Only 16,000 tonnes of Canadian canola oil had been sold to China versus 148,000 tonnes the same time last year, he said.

 

Hickling said it is generally true that the Chinese market structure favours imports of canola oil rather than seed once their domestic rapeseed harvest begins in May.

 

However, there might be a disconnect this year, he said.

 

"Because they are building up their oil reserves, there is still a lot of seed going into China, and the crushing plants, mostly located along the coast, are expected to continue importing despite the fact there is domestic production coming on line," Hickling said.

 

"There is such strong demand from China right now and Canada seems to be the one that is filling that gap," said Lawrence Yakielashek, general manager and vice president of trading company Alfred C. Toepfer Canada Ltd.

 

It is anyone's guess, though, how long that strong demand will continue, Yakielashek said.