Canola and rapeseed markets await the introduction of a 25% duty for Canada in the US

The markets for rapeseed, canola and other oilseeds remain in a state of uncertainty due to the possible introduction of import duties on goods from Canada and Mexico in the United States.

February futures for rapeseed closed yesterday, and traders switched to trading May contracts. Therefore, February futures fell by 31 €/t to 477.25 €/t, while May futures rose by 4.25 €/t to 516.75 €/t or 536.8 $/t.

Before the weekend, trump announced his intention to impose a 25% duty on imports of goods from Canada and Mexico in February. Analysts believe that the markets have not yet taken this situation into account in canola prices, however, in case of the duty, the consequences will be very severe.

Recently, the U.S. has become a key market for Canadian canola and meal, so the introduction of the duty will complicate the situation for producers and processors of canola in Canada, – said the Canadian Association of Oilseed Processors. The biggest threat is seen as recent changes in tax incentives for the biofuel industry in the United States, as well as plans to introduce a 25% duty on Canadian goods.

In 11 months of 2024, the US purchased 96.2% of all canola exported from Canada, which amounted to 3.14 mln tons, and 65.5% of Canadian rapeseed meal (3.44 mln tons). In addition, Canada exports 90% of its canola oil to the United States.

March futures for canola on the Winnipeg stock exchange yesterday rose 0.5% to 640 CAD/t or 442 $/t (+3.9% for the month), although the market expected a decline in prices.

In the event of a fall in canola prices in Canada, farmers will switch to growing other crops, which will support the quotes at a high level.

The average price for canola in Canada in 2023/24 MY was 695 CAD/t, in 2024/25 MY it is at 645 CAD/t, and next season it may decrease to 600 CAD/t, while the 5-year average is 690 CAD/t.

Decline in canola prices will increase pressure on canola prices in Europe, which is an important market for Canadian canola, especially amid declining demand from the U.S. and China, which is holding back purchases in anticipation of lower prices.

Tags: prices, Canada, rapeseed, USA