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Steady sales to Europe underpin demand for Australian canola

by Liz Wells, 08 February 2018

DATA released this week by the Australian Bureau of Statistics indicate a succession of Panamax vessels laden with Australian canola is making its way to European crushing plants, which once again are likely to absorb the bulk of Australia’s canola export surplus.

Crushing plants like this one in Ghent in Belgium are volume users of Australian canola.

European destinations took 450,371 tonnes, 96 per cent, of the 468,785t of Australian canola exports in November and December, in the early months of the new season shipping period. (Table 1).

Australian Oilseeds Federation (AOF) chief executive officer, Nick Goddard, said continued demand from Europe was likely to absorb much of the 2017/18 surplus.

“Europe is still our Most Favoured Nation, and China is starting to re-emerge on the horizon as a market with possibilities.”

Eastern Australia consumes around 900,000t of canola annually, and Mr Goddard said NSW, Victoria and South Australia were likely to have a current-crop export surplus of a similar size.

“Our crop turned out larger than expected. Early on, we were thinking we would have struggled to meet east-coast demand, but now we’re looking at a surplus of 1 million tonnes (1Mt) from eastern states and South Australia.”

Southern surplus

Mr Goddard said higher-than-expected yields in Victoria and southern NSW have generated much of the surplus.

“Northern NSW was very patchy, but closer to the Victorian border, and in Victoria, the crop came home strongly.”

Western Australia also produced more canola than initially expected, with its Grain Industry Association of WA forecasting 2017/18 production of 1.77Mt, nearly all of which will be exported.

Mr Goddard said factors including soybean production outlooks in the US and South America, and China’s tariff on dried distillers’ grain, as well as Canadian pricing of GM canola, would all impact on China’s interest in Australian canola.

“We will be competing head-on with Canada in the GM, but if we are looking at a higher-value targeted non-GM market, we can supply that too.”

Europe primarily uses Australian canola as an environmentally friendly biodiesel feedstock, and its status into 2018 has been confirmed following an Australian industry submission.

Increased area

With chickpea prices currently drifting lower, industry sources said they believed growers in northern NSW and pockets of southern Queensland could be expected to plant more canola and less chickpeas in 2018.

“It depends on how much rain we get between now and planting, but we know there is increased interest in growing canola in the north.”

In response to this, AOF has organised a Northern Canola Training Day in Moree on Thursday, 22 February to help growers access the latest agronomic advice.

 

  Jly Aug Sep Oct Nov Dec Tonnes
Belgium 150 0 21 43 63721 165080 229015
France 0 0 0 0 0 30000 30000
Germany 0 0 0 0 65778 125792 191570
Indonesia 0 0 0 0 0 109 109
Japan 300 22945 1629 1567 1727 1019 29187
Malaysia 224 0 0 0 500 3943 4667
Nepal 151 147 0 0 1572 4534 6404
Netherlands 64 64 62 62 0 0 252
New Zealand 497 763 250 255 1743 1483 4991
South Korea 1199 0 0 1001 0 801 3001
Vietnam 0 999 0 0 1 982 1982
Tonnes 2585 24918 1962 2928 135042 333743 501178

Table 1: Australian Bureau of Statistics monthly canola exports by destination for July-December 2017.

 

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