Market Morsel: Without Canada for canola……
I know, I know. We have written about canola a lot in recent weeks, but it is exciting.
Canadian canola is currently going down the gurgler. What impact does that have on the global canola scene?
It’s huge. Unlike the wheat trade, there are only a few nations that make up the majority of the global trade of canola. The first chart below 2010-2020 average exports for 97% of the global trade in canola.
Yes, that’s right. Canada, Australia, Ukraine, EU and Russia make up 97% of all export volumes. The interesting part is that Canada makes up 64%, and we follow behind at 17%.
Another point to note, whilst the EU is on the list as a top exporter. They are also the worlds biggest importer.
A combination of poor production, low stocks, and high domestic consumption will reduce the export program for the coming year. Alternate origins are few.
In general, this is positive for Australian canola prices; a rising tide lifts all boats and all that. There will likely be a substitution for other oilseeds if prices get too high. Still, in reality, it’s all good news for Australian farmers.
I have also included an additional chart which shows where our canola tends to go. Hint: it’s Europe.