Rising demand in China boosts canola exports
Canada’s grains and oilseeds sector remains heavily dependent on Chinese exports, as evidenced by an August report from the Canadian Grain Commission. China imported 796,900 tons of grains, oilseeds and pulses during the month, the highest in a decade.
Canola accounted for most of this year’s exports, at 718,000 tons. This is China’s best-ever canola exports, which occurred before the Chinese government announced its intention to investigate the importation of canola into its market.
The anti-dumping investigation is likely related to Canada’s announcement to increase duties on Chinese electric cars to 100% and a 25% tariff on steel and aluminum imports.
China is looking to increase its vegetable oil stocks due to tensions in the global palm oil market. The country typically imports 5 to 5 million tons of palm oil during the crop year, as well as about 2 million tons of rapeseed oil. With palm oil futures trading at near two-year highs, Chinese buyers are looking for alternative vegetable oils.
China processes a huge amount of vegetable oils, with soybeans and rapeseed (canola) as feedstocks. The country’s rapeseed harvest this year totaled 15.6 million tons, prompting the need to purchase Canadian canola.
Chinese demand for Canadian canola has been strong for six weeks and has led to record rapeseed exports for the 2024-2025 crop year. Canola exports for the ninth week totaled 1.95 million tons, up 1.22 million tons from last year. China accounted for the majority of export volumes.
Canadian canola exports are expected to total only 7.5 million tons this year. Shipments to China are likely to continue through the first half of the crop year before declining in early 2025.
As for import duties due to the anti-dumping investigation, it can be assumed that they will be imposed when China purchases enough to meet domestic vegetable oil needs. Anti-dumping duties, if imposed, are likely to have a more significant impact on export volumes in the marketing year 2025-26.
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