A smaller crop here and a larger one in Australia will likely combine to trim Canadian canola exports in 2022-23, market sources say.
In its November supply-demand estimates, Agriculture Canada forecast Canadian canola exports for the current marketing year at 9.3 million tonnes, up more than 76% from the previous year.
However, the Ag Canada forecast was based on Statistics Canada’s September model-based production forecast of 19.1 million tonnes. Meanwhile, last week’s updated StatsCan production report lowered this year’s crop to 18.17 million tonnes, leaving less supply for exports. Additionally, a record large canola production forecast for Australia means Canadian supplies will see more competition in international markets, which has the potential to trim shipments as well.
“That 9.3 million tonnes becomes 8.3 million immediately,” said Bruce Burnett, MarketsFarm Director of Markets and Weather.
The December production report of the Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES) forecast a 4% increase in that country’s canola production to 7.3 million tonnes.
Ken Ball, broker with PI Financial in Winnipeg, suggested that with a crop that size, Australia’s canola exports could push 6 million tonnes. He said the country averages 2.5 million to 2.7 million in annual canola exports, but another large crop last year allowed overseas shipments to hit 4.8 million tonnes.
“Six million tonnes is going to put a dent in our exports,” Ball said.
Ball estimated Canada’s canola exports at no more than 7.5 million tonnes, and probably somewhat less. However, he cautioned, “it’s a long year yet and that could change.”