Canada rapeseed production in 2021/22 is forecast down 400,000 tons this month to a 14-year low of 12.6 million. With beginning stocks already tight due to strong demand over the past few years, the smaller crop is suppressing available supplies for both crush and exports.
However, due to strong Canadian crush margins, the disruption is disproportionately affecting rapeseed exports over crush. Through the first 3 months of the marketing year, crush is down 9 percent while exports are down by almost 50 percent.
The plummet in Canada rapeseed exports through the first 3 months of 2021/22 has affected all its major destinations. Exports to the EU fell by nearly two-thirds, the UAE experienced a 50-percent dip, and China and Japan saw 40-percent declines.
Markets in North America experienced more muted declines with Mexico down 12 percent and the United States down just 4 percent.
With tight global supplies and Canada exports plunging, major importers will likely turn to Australia to offset displaced imports. Opposite to Canada, Australia rapeseed production is revised up 500,000 tons in 2020/21 and 700,000 in 2021/22.
As a result, both production and exports are forecast to be records at 5.5 million tons and 4.6 million, respectively.
While not as drastic as seed exports, Canada rapeseed oil exports are down nearly 20 percent through the first 3 months of 2021/22. Production is forecast down more than 20 percent from last year on both smaller crush and a lower oil extraction rate.
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According to Statistics Canada crush data, rapeseed oil extraction rates are down significantly in 2021/22 as high temperatures experienced during seed development resulted in lower oil content for the crop. In total, Canada rapeseed oil production is forecast down 1.0 million tons from last year, and exports down nearly 600,000 tons.
The United States and China are the two largest markets for Canada rapeseed oil, accounting for about 85 percent of exports. From August-October, rapeseed oil exports to the United States are up over 20 percent but are unlikely to sustain this strong growth. Exports to China are down nearly 90 percent as tight Canada supplies have impacted China and other smaller markets much more drastically.
As a result, China will likely shift to sunflowerseed oil from Russia and Ukraine to meet edible oil demand. Further supported by a combined 1-million-ton greater supplies of sunflowerseed production in Russia and Ukraine this month, there will be ample exportable sunflowerseed oil supplies on record production and crush coupled with high beginning stocks.
Trade and consumption of sunflowerseed oil is forecast to grow in 2021/22 for China and other import markets impacted by tight Canada rapeseed oil.