Canola pours into one of the hatches on the Belguardian moored at Portland in Victoria, and now on its way to California. Photo: Terry Sim

A CARGO of Australian canola is on its way to the United States in what is believed to be the first bulk shipment of the oilseed to North America.

The parcel of around 33,000 tonnes left the Port of Portland in Victoria on Saturday, and is sailing direct to Stockton, California.

Penny Newman’s site on the San Joaquin River at Stockton, which has over the years been a destination for some of Australia’s bulk cottonseed, appears to be the likely destination.

Penny Newman is a volume trader of canola and other meals, as well as being a major participant in the US cottonseed and Californian grain and fertiliser markets.

The Wilmar Fats & Oils site is located next door, and while the Wilmar website says it processes palm and coconut oil, it could also be the destination.

Australian Oilseeds Federation executive officer Nick Goddard said Australian Bureau of Statistics data indicates Australia has shipped canola seed to both the US and Canada in the past.

“That has only been small amounts, less than 200 tonnes, so possibly it’s been planting seed, or some trial shipments for R&D,” Mr Goddard said.

“This shipment is the first I can see of this sort of commercial quantity.”

Indicator of tight market

The impact of drought last year on US and Canadian canola production, exacerbated by the effect of Russia’s invasion of Ukraine and Black Sea sunflower seed and oil exports, have caused extreme tightness in world oilseed supplies.

While the North American canola crop is looking on track at this early stage of the growing season, it appears domestic supplies beyond the heartland of production, namely the Canadian Prairies and the north-west US, are hard to find.

The cheap basis and plentiful supply of Australian canola has seen it meet very strong demand in the buoyant global market for oilseeds and vegetable oil.

In its World Agricultural Supply and Demand Estimates report released March 9, USDA said the growing tightness in vegetable oil supplies was evident in price trends over the preceding five weeks.

“The drought in Canada last year has kept Canadian rapeseed at high levels over the past six months, while the shortfall in South America soybean production contributed to the rise in soybean and palm oil prices in February,” the report said.

“Sunflower seed oil prices have been on the rise since the situation in the Black Sea region deteriorated in late February.”

Mirror of Manildra move

The deal appears to mirror the Manildra Group’s purchase of successive cargoes of Canadian wheat to process at its Shoalhaven Starches plant at the tail end of the 2017-19 drought centred in New South Wales.

While wheat was available in Australia during the drought, the quality required in the volume required was not, and Manildra was granted permits to use import Canadian wheat to supplement domestic supplies.

Its imports stopped once new-crop Australian wheat of required specifications became available.

It appears likely that Australian canola going to the US will likewise be a short-lived phenomenon.

US supplies look tight

According to the US Canola Association, the US had around 890,000 hectares planted to canola in 2021, with 79 per cent of it in North Dakota, followed by Montana on 7.7pc, Washington on 5.4pc and Idaho on 3.6pc.

Nearly all of it is consumed within the US.

Canada is the world’s biggest canola producer by far, and Canola Council of Canada puts the crop harvested last year at 12.6 million tonnes (Mt) from 9.1Mha planted.

It exported 8.4Mt, with the US one of its customer destinations.

Because of drought, Canada’s 2021 crop was well down from close to 20Mt produced in each of the previous five seasons.

This season appears more promising, and if the US does purchase more cargoes of Australian canola, their arrival is likely to stop once new-crop North American seed becomes available in September-October.

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