Australia’s 2022–23 Canola Crop, Forecasted To Reach a New Record High Is Good for International Buyers

Australia’s current canola crop has been revised up and set to reach a new record high of 7.3 million mt. In the September 2022 quarterly report, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) put the crop estimates at 6.6 million mt. The current crop estimate is thus a 0.7 million mt upward revision of the old estimates and breaks the previous year's record crop output of 7 million mt which was also initially forecast at 6.3 million mt. (See our crop estimates article in June,2022).

In Western and Southern Australia, Conditions in the spring were perfect, aiding crop development and growth. Crop size in these states has led the drive for the record crop. That said, recent stormy conditions have been reported to have caused damages, but these are localised and aren’t expected to significantly cut down on estimates. Production in South Australia is revised up 13% to 0.6 million mt. That in Western Australia is also revised up 27% from the last forecast in September to 4 million mt.

Adverse weather in eastern Australia hindered crop development and harvest: higher than-normal rainfall across the east coast caused water-logging, flooding and disease and major crop losses. This in turn damaged some winter crops and delayed harvest. The crop quality and volume from both New South Wales and Victoria have however not been disturbed much to impact total output albeit upsetting to affected farmers. The 2022-23 crop forecast for Victoria has been put at 1.4 million mt, a slight 4% upward revision while that of New South Wales has been revised down 24% to 1.3 million mt.

In the remaining canola-growing regions, the revisions have been mixed. Queensland's production is revised up threefold to 10 thousand tonnes, while In Tasmania, production is to remain at just a little under 11 thousand tonnes, the same as the forecast published in September 2022. Despite the adverse weather issues, total Aussie canola production points to a new record crop at 7.3 million mt, up 4 % from the 2021-22 crop year. This is evidence of the resilience of the Australian crop to diseases and weather damage owing to previous investments in broader farming systems and the application of best practices by farmers.

Statistics Canada in their last estimated areas, yield, production, average farm price and total farm value of principal field crops report revised the Canadian canola crop down. The 2022-23 crop was revised by 5% to 18.17 million down from the initial 19.09 million mt estimates. What the record Aussie crop does is loosen the global supply and demand balance sheet adding to the already positive fundamental rapeseed picture of the European Union and Ukraine.

Tridge expects an increase in global ending stocks and an uptick in the global stocks-to-use ratio considering the expected increase in exports from Australia and Ukraine where domestic crush is forecasted down. This puts the oilseeds trade in somewhat of a comfortable situation- international buyers of canola/rapeseed and others that purchase to crush into oil would see enough supplies in the market to source from for quite some time. Buyers in the EU who import mostly Australian canola for biodiesel use will welcome the news of the higher Aussie crop likewise buyers in Asia and the Middle East that use it for food.