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USDA expects Canadian rapeseed production to hit a 14-year low in 2021/22

December 15, 2021

1 mins read

Canadian rapeseed prices are up by 16% quarter-on-quarter (q-o-q) to CAD 980/MT on 10th December due to weak expected supply for 2021/22. Production of Canadian rapeseed for the 2021/22 marketing year (MY) was revised lower by 400,000 tonnes to a 14-year low of 12.6 million tonnes in December 2021 by the United States Department of Agriculture (USDA). Due to poor production and low beginning inventories, there has been limited available supply for both rapeseed crush and exports. As a result of strong Canadian crush margins, the supply for exports has been much more affected in comparison, with crush being down by only 9% while exports fell by approximately 50% between Aug-Oct 2021, year-on-year (y-o-y). This has resulted in a fall in Canadian rapeseed exports to the EU by nearly two-thirds. Similarly, there has been a 50% export decline to the UAE and 40% to China and Japan. However, the drop in exports to North America was not as drastic, with exports to the US falling by only 4% and Mexico by 12%. With production and export of Australian rapeseed forecast at record levels in 2021/22, major importers would likely turn to Australia for their imports.

Canadian rapeseed oil exports have also fallen by nearly 20% y-o-y due to smaller crush and lower extraction rates; thus, rapeseed oil production is projected to decrease by more than 20% y-o-y. China is likely to switch to sunflower seeds to meet its edible oil demand due to lower rapeseed availability. Consequently, trade and consumption of sunflower seed are likely to grow in both China and other Canadian rapeseed import markets. Increased demand for sunflower seeds as a substitute product could start to bring rapeseed prices down after Q1 2022.

 

Roxanne Nikoro
Roxanne Nikoro

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