Canola Market Snapshot 2019

By: Samara Hutton & Jay Whetter

The total value of Canadian canola seed, oil and meal exports for crop year 2018–19 was $10.0 billion, down from $11.1 billion in 2017–18.

Lower volume of seed exports was a major factor in the lower value. Canadian canola seed exports declined to 9.14 million tonnes (MT) from 10.77 MT in 2017–18. Oil and meal were basically flat: Oil exports declined to 3.12 MT, down from 3.14 in 2017–18, and meal exports rose 2.3 per cent to 4.64 MT, up from 4.54 in 2017–18.

The drop in seed sales is not really a surprise, with China suspending export licences for two Canadian companies in March and basically stopping imports of any Canadian canola seed. (Find the latest on China at canolacouncil.org.) Canola seed exports to China in 2018–19 were just over three million tonnes, compared to four million tonnes, or so, for each of the previous five years. On a positive note, the value of oil and meal exports to China went up over the past year, but at the crop year’s end, the total value of Canadian canola exports to China was $3.2 billion, down from $3.8 billion in 2017–18.

Table 3 is based on data from the United States Department of Agriculture’s Foreign Agricultural Service. Find them online at www.fas.usda.gov.

With this, the U.S. regained its spot as the top value market for Canadian canola products, even though volumes exported to the U.S. declined for each seed (down 21.4 per cent from 2017–18), oil (down 7.7 per cent), and meal (down 1.1 per cent). Value and volumes also fell for Japan and Mexico. These top four market accounted for 86 per cent of Canadian canola product exports in 2018–19 with an increased percentage going to second-wave markets. See more on second-wave markets later in the article.

The other factor in lower overall export value is price. Average export value for canola seed in 2018–19 was $544 per tonne, down from $564 in 2017–18. These values are derived from StatCan data and posted in the statistics section at canolacouncil.org.

Average export value for canola oil declined to $968 per tonne, down from $986. Export value for meal went up, ending 2018–19 with an average of $359 per tonne, compared to $355 in 2017–18.

Canadian canola production was 20.3 MT in 2018–19, down from the record 21.3 MT in 2017–18. StatsCan estimates the 2018–19 Canadian canola carryover stocks at 3.9 MT, which is up 55 per cent from the previous year.

Global oilseed situation

USDA Foreign Agricultural Service stats show how Canadian canola fits into the global market. In its September 2019 ‘Oilseeds: World Markets and Trade’ report, the USDA estimated global oilseed production for 2018–19 at 600.7 million tonnes. This is an all-time high. It also puts global oilseed carryover at 130.6 MT, which has trended sharply upward over the past four years. It was 93.5 MT in 2015–16, rising incrementally to the current level.

Of the 2018–19 global oilseed production, canola/rapeseed accounted for 71.9 million. Soybeans, at 362.0 million, made up more than half the global oilseed production.

Palm oil, which doesn’t show up on oilseed production stats, remains the top vegetable oil on the global market. Of the 203.7 MT of vegetable oil produced in 2018–19, palm was 74.1 MT, soy was 56.0 MT and canola/rapeseed was 27.5 MT. As for five-year trends, palm and soybeans keep rising each year while canola/rapeseed has been flat. (See Table 3.)

Second-wave markets for canola

While the value of exports to the four big markets declined in 2018–19, second wave markets increased in value. (See Table 4.) Notable second wave markets in 2018–19 include:

Pakistan continued to be the most valuable second wave market for canola products in 2018–19, importing 778,000 tonnes of seed worth over $400 million. This represents 4.0 per cent of total Canadian canola export value. Seed exports to Pakistan have fluctuated greatly throughout the last five to 10 years.

Bangladesh increased imports of canola seed from just 22,000 tonnes in 2017–18 to over 208,000 tonnes in 2018–19, making it the eighth largest seed export market this year. Seed exports to Bangladesh fluctuate greatly on an annual basis.

European Union imported $309 million of Canadian canola in 2018–19, making it the sixth most valuable export market.This is up from $206 million in 2017–18, driven by a rise in seed imports.

United Arab Emirates decreased seed imports to 457,000 tonnes, down 28 per cent from the year before, though it remains the seventh most valuable export market overall.

South Korea continued to increase demand for canola oil, importing 136,000 tonnes – well above the previous five-year average of 101,000 tonnes. South Korea remains the third most valuable export market for oil, and the eighth most valuable market overall, valued at $135 million.

India resumed direct Canadian canola imports, but numbers remain relatively small – 15,000 tonnes of oil and 2,800 tonnes of seed. India does however import rapeseed/canola oil from the United Arab Emirates where Canadian canola is a significant supplier of seed for crushing.

Other notables are Thailand and Vietnam, potential growth markets for canola meal. They were the three and four markets for Canadian canola meal in 2018–19, after the U.S. and China. Meal exports to Thailand were 23,000 tonnes compared to no exports in 2017–18. Meal exports to Vietnam were 22,000 tonnes compared to 7,300 tonnes in 2017–18.

For a closing note, USDA figures show domestic consumption of canola oil in Canada at 980,000 tonnes in 2018–19 and of canola meal at 650,000 tonnes. This would make the domestic market our fourth biggest for oil and third biggest for meal.