Rapeseed prices fell, canola rose amid new wave of tariff wars

Uncertainty in the EU rapeseed and Canadian canola markets allows speculators to swing prices up and down by 2-3% during the session on the back of tariff news, even as processors in the physical market are cutting back on purchases due to falling crude and vegetable oil prices.

Canada is imposing a 25% import tariff on all goods from the US worth $155 billion (with tariffs on $30 billion effective March 4, and tariffs on the remaining $125 billion effective March 25). In response, Trump has promised to double tariffs on Canadian goods.

Against this backdrop, March canola futures on the Winnipeg exchange fell 4.6% to CAD 607/t at the beginning of the week, and yesterday rose 1.9% to CAD 618.5/t or $ 431/t (-5% for the month).

After the imposition of tariffs against major trading partners, the US stock market collapsed by $3.6 trillion, so large companies turned to the president to explain the negative impact of tariffs on the economy. Yesterday, Trump already said that he could cancel tariffs on cars or other goods.

May rapeseed futures on the Paris exchange fell another 2.3% yesterday to €499.5/t or $540/t (-6.7% for the week, -3.7% for the month) under pressure from a 3.7% drop in oil prices for the week and a 4% appreciation of the euro against the dollar since the beginning of the week on news of an €800 billion EU investment plan to strengthen security. The spread between rapeseed and canola prices widened to $110/t, which will help increase canola supplies from Canada to the EU.

Tariffs imposed on China, Canada and Mexico have sharply reduced U.S. agricultural exports, and mirror measures by China and Canada have sent fertilizer prices soaring. Falling commodity prices and rising production costs are causing discontent among American farmers, whom Trump promised a “golden age of America.”

The market is interested in whether the tariffs will remain in place for a long time or whether the situation will soon culminate in a deal that will allow Trump to declare victory.

Canadian Prime Minister Justin Trudeau said Canadian tariffs would remain in place until the U.S. reverses its decision, warning that the government was considering additional non-tariff measures if the U.S. restrictions persist.

Tags: EU, prices, Canada, rapeseed