High canola prices in Canada will contribute to an increase in planted area in 2025

The introduction of tariffs by China and the US on Canadian canola oil and meal initially collapsed canola prices and raised concerns about a sharp decrease in canola acreage in the new season, but a significant increase in export and domestic demand for canola in Canada corrected the situation and supported prices.

According to the Canadian Food Inspection Agency, in the MY 2024/25 (as of April 24), the country increased domestic canola consumption by 7.1% to 8.45 million tons compared to the previous season, and exports by 72.3% to 7.52 million tons, in particular to China from 2.2 to 3.4 million tons, to the EU from 103 to 744 thousand tons, to Japan by 75.5% to 969 thousand tons, while supplies to the UAE decreased by 123.4% to 447 thousand tons.

According to Oil World estimates, in March, the volume of canola processing in Canada increased by 16% compared to February to 1.02 million tons, which was the second highest figure after the record 1.1 million tons in October 2024.

July canola futures on the ICE Futures exchange rose 10.7% to CAD 699.4/t or $ 506/t in the month due to increased demand, although November futures rose only 3.5% to CAD 652/t on the back of a possible increase in sowing areas and favorable weather for crops in Canada.

According to the USDA FAS forecast, in the 2025/26 MY, canola production in Canada will increase compared to the previous season from 17.84 to 18.46 million tons.

At the same time, the USDA estimates the canola harvest in the MY 2024/25 at 18.8 million tons, and Statistics Canada estimates it at 17.84 million tons, so traders are trying to understand what the country’s carryover stocks will be.

On the Paris exchange, August rapeseed futures fell 8.1% in a month to €462/t or $523/t on forecasts of an increase in the EU harvest in the new season, although May futures reached €544.75/t in April.

A sharp decline in rapeseed prices in the EU will stop canola supplies from Canada and will contribute to an increase in rapeseed imports from Ukraine.

Tags: prices, Canada, rapeseed