Canadian canola exporters look to EU biofuel market

Canadian canola producers have been looking towards the EU biodiesel industry to pick up the export slack resulting from trade tensions with China.

The industry had started searching for new export opportunities after Canadian canola exports were down 9.3% in the 2018/19 grain year, Bloomberg reported on 26 August.

China revoked import licenses for two Canadian canola companies, citing pests found in shipments in March. However, it was widely suspected that this was done in retaliation to Canada arresting technology firm Huawei executive, Meng Wanzhou, last December at the USA’s request.

Europe’s rapeseed harvest was expected to fall to a 13-year low after dry weather crimped plantings and a pesticide ban boosted insect threats, with import demand set to reach a record 5M tonnes in the season that started in July, according to the US Department of Agriculture.

Prospects looked better in fuel since European demand for canola as a cooking oil was limited due to most Canadian varieties being genetically modified, while canola meal consumption faced competition from cheaper wheat and barley, Bloomberg wrote.

The EU secured most of its canola imports from Australia and Ukraine in recent seasons, with just a tenth coming from Canada, European Commission data showed.

Moreover, Australia – which was expected to have a smaller crop than Canada – could be in a better position to supply canola to China, Boomberg said.

However, canola’s cheap prices may boost its appeal.

Canola futures in New York were down about 7% this year while rapeseed futures in Paris were up 4%.

The main issue holding back exports to Europe was that farmers were not certified, according to the Canola Council of Canada.

Spokesman Brian Innes said most growers just needed to register and prove their land had been used for farming since 2008.