Canola quotations decline due to China’s intentions regarding Canadian rapeseed

Yesterday, exchange quotations for rapeseed and canola decreased by 3.5-7.3% on the news of China’s intentions to conduct an anti-dumping investigation against Canadian rapeseed in response to the introduction of duties on imports of electric cars, steel and aluminum from China. At the end of the session, quotes recovered almost to previous levels as the global rapeseed balance for MY 2024/25 continues to deteriorate.

According to the Chinese Ministry of Commerce, canola imports from Canada increased by 170% in 2023, from January to July 2024 it amounted to 2.65 million tons worth $1.44 billion. In second place is Russia with a figure of $77.6 million. China claims that Canada sells canola below cost, which leads to damage to Chinese farmers. Therefore, the ministry has announced intentions to launch an anti-discrimination investigation into the tariffs imposed by Canada and to seek a settlement of the dispute at the World Trade Organization (WTO).

November canola futures on the Winnipeg exchange fell 7.3% yesterday morning, but then recovered to 591 CAD/t or $436/t (-4% for the day, -1.3% for the week, -3, 2% for the month).

Traders began to more closely analyze forecasts of a decline in the EU harvest to 16.9-18 million tons, which will force the Union to increase rapeseed imports by 2-3 million tons. China’s rejection of Canadian canola will allow to increase its supplies to the EU market, which have been minimal in recent years. Analysts also note that China will hardly be able to replace Canadian canola, so it is expected that the country will increase imports of vegetable oils, which against the background of reduced production of sunflower oil will lead to a possible increase in prices and additional costs of Chinese importers.

Against this backdrop, Ukrainian farmers are already postponing rapeseed sales until spring, in anticipation of an increased shortage of raw materials in the EU.

Tags: China, EU, prices, Canada, rapeseed