Agriculture Canada has tentatively raised its 2025-26 canola export forecast on the heels of the Canada-China tariff deal reached last week.
In updated monthly supply-demand estimates released Wednesday, Ag Canada raised expected canola exports to 8.2 million tonnes, up 200,000 from the government’s December estimate. With that increase – and no other supply or demand revisions from last month – projected 2025-26 canola ending stocks were trimmed by an identical 200,000 tonnes to 2.75 million – still up sharply from 1.597 million a year earlier.
If accurate, canola exports would still fall below the previous year’s 9.331 million tonnes, but remain 3% above the five-year average.
In its accompanying commentary, Ag Canada acknowledged that through week 22 of the 2025-26 marketing year, 2025-26 canola exports were running a hefty 41% behind the year-earlier pace.
“There is optimism, however, given the recent announcement that China is expected to lower tariffs on Canadian canola seed to approximately 15% beginning March 1, 2026,” Ag Canada said, adding the export forecast remains subject to change as more details of the tariff deal become available.
Late last week, Prime Minister Mark Carney announced a deal with Beijing that will see Chinese tariffs on imports of Canadian canola seed reduced to near 15% from current levels nears 85% effective March 1. China slapped the elevated levies on Canadian canola back in August, widely seen as retaliation for Canadian tariffs on Chinese-made EVs.
Those tariffs had effectively halted Canadian canola seed shipments into China. China was Canada's largest customer for canola seed, with a market valued at $4 billion in 2024.
As part of the deal with Beijing, Canada agreed to cut its EV tariffs and allow up to 49,000 Chinese EVs into the Canadian market on an annual basis.
Reports this week said China has already purchased one cargo of Canadian canola for delivery in March, since the deal was struck.
Ag Canada has also raised its 2025-26 season average price forecast for canola, raising it $5 from December to $665/tonne, compared to the 2024-25 average of $677.
