EU expected to keep buying Canadian canola

Published May 21, 2020

Tridge summary

The European Union (EU) has emerged as a major buyer of Canadian canola, with purchases exceeding the previous year by more than five times, making it Canada's second-largest customer behind Japan. However, concerns have been raised about the potential impact of COVID-19 on the EU's biodiesel production, which could affect canola imports. Despite these concerns, the United States Department of Agriculture forecasts a increase in EU rapeseed/canola imports to six million tonnes in 2020-21. Analyst Jon Driedger holds a more cautious view, predicting a 15% decrease in EU biodiesel production, but not necessarily a similar decrease in canola demand. The EU's biodiesel sector may return to 90% of previous fuel demand at a slower pace, with total biodiesel production potentially dropping by 15%, but not all feedstock ingredients will be affected equally. The EU's internal production of rapeseed may also decrease due to poor weather and the ban on neonicotinoids, which could impact Canadian exports. Australia is expected to see a rebound in production, which could affect Canadian exports to the EU, although it is unlikely that non-GM Australian canola will be used in the biodiesel market due to its higher price. China's sudden significant purchase of Canadian canola in March is seen as a potential buffer for any potential drop in EU demand.
Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Slumping European Union biodiesel demand won’t completely destroy what has become a thriving market for Canadian canola, according to some new estimates. The EU has emerged as a top buyer of Canadian canola, purchasing 1.39 million tonnes through the first eight months of 2019-20, which is more than five times year-ago levels. In fact, it is Canada’s second-largest canola customer this year, ranking behind Japan’s 1.46 million tonnes but ahead of China’s 1.16 million tonnes. There are growing concerns that the EU market could be drying up in the new crop year due to slumping biodiesel production caused by COVID-19 travel restrictions.ADVERTISEMENTNot according to the United States Department of Agriculture. It forecasts a 200,000 tonne increase in EU rapeseed/canola imports to six million tonnes in 2020-21, according to a report released last week. Jon Driedger, analyst with LeftField Commodity Research, thinks that seems optimistic but he noted that the USDA estimates are as ...

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