Australian canola prices have been historically high this year and increased again this week.

Key points:

  • Statisctis Canada has slashed its canola crop forecast to 12.8 million tonnes, down 34 per cent on last year
  • Australian canola prices have surged beyond $900 a tonne
  • Frost ruining the dream run for some farmers in Western Australia

The reason was Canada. 

Canada is the world’s largest producer and exporter of canola, but drought and record temperatures have devastated this year’s crop.

The latest crop forecast by Statistics Canada has production dwindling to 12.8 million tonnes, which is down 34 per cent from last year, and would be Canada’s smallest canola crop since 2010.

Speaking to ABC Landline while harvesting in Saskatchewan, Danielle Wildfong said it had been a challenging year for growers.

“Some of Saskatchewan has been a third [of their normal production] and some places are getting three bushels per acre which is virtually nothing,” she said.

“It was probably one of the hottest summers I’ve had.”

The slashing of Canada’s crop forecast had an immediate affect on the market this week, with ICE canola futures rising 4 per cent to around A$950 a tonne.

It lifted the Australian market as well, with canola now fetching over $900 a tonne in Western Australia and parts of eastern Australia.

Ms Wildfong said the high prices in Canada has softened the blow for some.

“It’s been tough for some of our farmers in the south, but we’re optimistic that we’ll get this crop off and we’ll have a better year next year,” she said.


Opportunity beckons for Australia

West Australian-based grain trader with Australian Asian Agricultural Exports, James Foulsham, said Australian canola would fill some of the voids left by the shortage of Canadian supply. 

“It is an unfortunate situation for Canada but it is a fortunate story for Australia, especially given [the] canola price this year,” he said. 

“In the foreseeable future prices are going to stay relatively elevated until Canada gets back online and the market gets confidence the same thing is not going to happen again.”

Mr Foulsham said while Australian canola may find its way into some new markets, it was mainly an increased market share which would benefit Australian farmers this season. 

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Australia’s farmers on track for record-breaking season

“Where [countries] were buying Canadian before, they will substitute it for more Australian canola,” he said. 

“You might see some new markets pop up here and there — like Pakistan and Nepal — [and] they will probably take more Australian.”

Mr Foulsham said he also expected prices of other grains like wheat, oats and barley to increase as the Canadian harvest progressed. 

Frost wipes $250m off WA crop, says GIWA

All the ducks are lining up for a big and very valuable canola harvest in Australia, but there is a long way to go, and already there has been some trouble. 

According to the Grain Industry Association of WA’s (GIWA) latest update, severe frost events earlier this month have wiped out roughly 700,000 tonnes of WA’s estimated winter crop, valued at $250 million.

“The worst of the areas are showing up very clearly now and some growers are saying they’re well over a 50 per cent loss on what the potential was,” said GIWA’s crop report author Michael Lamond.

“The canola tonnage is still going to be well over two million tonnes, which is well and truly a record for WA. A lot of the canola didn’t get affected as much as the wheat.

“So canola is probably the standout; it’s still worth quite a few dollars per tonne and there’s a lot of tonnes about, so that’s certinaly a bright light.”


Posted , updated 

Australia is sitting on a seriously valuable crop of canola
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