CANADIAN CANOLA PRODUCERS EARN WINDFALL FROM CHINA DEMAND
Canadian canola prices have soared to the highest in nearly two years, despite a diplomatic dispute between Ottawa and Beijing, as exporters find roundabout ways to reach top oilseed buyer China, Rod Nickel and Hallie Gun reported for Reuters on August 10, 2020.
Chinese authorities have since March 2019 blocked canola shipments by two Canadian exporters, an action they took after Canadian police detained a Huawei Technologies executive in late 2018 on a United States warrant. The dispute however, has not spoiled China’s appetite for canola, which is mainly processed into vegetable oil. While China is buying less from Canada directly, it has bought canola oil instead from Europe and the United Arab Emirates, with some of that oil made from Canadian canola, traders said.
ICE canola futures RSc1 on Tuesday hit the highest nearby price since October 2018. Prices of China’s rapeseed oil, another name for canola oil, have also rallied, partly because of limited Canadian supply. “Profits are extravagant. Anyone who has the resources to import (canola oil) will definitely buy,” said a manager with a China-based canola importer. “It is like gold oil now.”
Canadian canola exports to China fell 45% year over year during the 11-month period through June, however total canola exports have jumped 9%, helped by a tripling of sales to France and double the shipments to the UAE. Canada is the world’s biggest canola producer, and the yellow-flowering plant earned farmers C$8.6 billion ($6.42 billion) last year, the most of any crop. China meanwhile boosted canola oil imports from Europe, Russia and Australia, with some of that oil made from Canadian canola, said another China-based trader.