Fuel and fertilizer disruptions to reduce Australia’s canola production

Australia’s oilseed sector is facing significant challenges due to developments in the Middle East, which have disrupted supplies of diesel fuel and nitrogen fertilizers while driving prices sharply higher. These factors are having the greatest impact on canola, one of the country’s key export crops.

Canola production in the 2026/27 marketing year is forecast at 6.2 million metric tons, down 19% from the previous season. Despite the decline, output will remain historically strong. The drop is driven by both lower yields and a reduction in planted area as farmers respond to rising input costs.

Exports are also expected to decrease by around 16% to 4.7 million tons. At the same time, crushing volumes are projected to remain stable at 1.3 million tons, supported by expanded domestic processing capacity. In contrast, canola oil exports are forecast to reach a record 300,000 tons, driven by strong demand, particularly from the biofuel sector.

Growers are adjusting their planting strategies by reducing reliance on nitrogen-intensive crops such as canola and wheat. Instead, there is a shift toward crops like barley, pulses, and forage. Uncertainty over the availability of fertilizers for in-season application remains an additional concern.

Seasonal conditions are also shaping the outlook. While soil moisture levels at the start of planting are slightly improved compared to last year, below-average rainfall is expected in the coming months, limiting yield potential even if planted area remains relatively stable.

Meanwhile, other oilseed segments show positive trends. Cottonseed production is forecast to increase to 1.29 million tons благодаря improved irrigation water availability, with exports rising by 11% to 500,000 tons. Olive oil production is also expected to grow to 23,000 tons, reflecting the crop’s natural biennial yield cycle.

Tags: Australia, rapeseed, crop forecast