Canada is forecast to see a reduced canola planted area as ending stocks rise in 2019/20 on the expectation of turbulent global oilseed trade, according to a 21 May Global Agricultural Information Network (GAIN) report from the US Department of Agriculture (USDA).

The canola area planted for 2019/20 had been adjusted from 9.3M ha to 8.9M ha as Canadian farmers alter planting decisions in response to a less certain marketing outlook for the crop, the GAIN report said.

China stopped accepting canola imports from Canadian grain companies Viterra Inc and Richardson International in March, citing grain inspection issues, although observers believe the move is linked to Canada’s arrest of Meng Wanzhou, vice president of Chinese technology firm Huawei. Meng, who is the daughter of Huawei’s founder, was arrested on 1 December at the request of US tax authorities.

The GAIN report lowered the 2019/20 canola production estimate from 20.5M tonnes to 19.75M tonnes, based on a reduced planted area, although yields were expected to be slightly higher than the five-year average following a wet winter that improve soil moisture levels.

The USDA projected a fall in 2018/19 exports to 9.75M tonnes, 800,000 tonnes lower than originally projected in March. Projected stocks were adjusted to 3.5M tonnes, nearly 1M tonnes higher than forecast two months earlier.

Canadian exports to China from January to the end of March dropped to 630,000 tonnes, half of the three-year average for the same period, said the USDA.

“With no new plants expected to come online in the next 12 months, it does not appear that Canadian crushers will be able to increase crushing to utilise larger available volumes of Canadian canola seed in 2018/19 or 2019/20,” the USDA said.

“There does not appear to be room for Canadian crushing facilities to absorb the additional canola stored on farms.”