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Canola crush, exports on target

Canada’s canola processors should have no problem meeting Agriculture Canada’s domestic crush estimate for 2016-17.

“It wouldn’t be surprising to see us reach nine million tonnes of crush in 2016-17,” said Chris Vervaet, executive director of the Canadian Oilseed Processors Association.

COPA members had crushed 3.43 million tonnes as of Dec. 14, which is 419,000 tonnes ahead of the previous year’s pace.

Agriculture Canada is forecasting 8.9 million tonnes of crush, which is only slightly lower than its export estimate of 9.5 million tonnes.

The Canola Council of Canada expects domestic crush to soon overtake exports.

In its Keep it Coming document, the council forecasts 14 million tonnes of crush and 12 million tonnes of exports by 2025.

“We are well on the way to meeting that target,” Vervaet told delegates attending the Canola Industry Meeting.

COPA members almost tripled their crush capacity from 2005-16. It is now at 10.7 million tonnes. Crushers are operating at 88.5 percent of capacity compared to 82.9 percent a year ago.

Eighty-five percent of the four million tonnes of oil and five million tonnes of meal produced by COPA members is exported.

The United States is by far the biggest market, consuming 64 percent of the oil followed by China at 16 percent.

“We’re hoping markets outside of the United States continue to take up a bigger piece of that pie,” he said.

The U.S. accounted for more than 90 percent of meal exports until very recently, but China has been coming on strong the past couple of years and now makes up 20 percent of meal exports.

COPA has three policy priorities:

  • Food and feed safety modernization efforts happening in countries such as China, the U.S. and Canada.

“There are implications for oilseed processors through this increased government oversight,” said Vervaet.

COPA wants Canada’s regulations in areas such as preventive controls and labelling to be in line with those of its trading partners.

“There are certainly some risks there in terms of not being aligned with other countries and putting us at a competitive disadvantage.”

  • Transportation — The six member companies of COPA rely on rail to get 75 percent of the oil and meal they produce at their 14 crush facilities to market.

COPA wants the railways to face penalties for failing to live up to their contractual obligations. As well, it wants service to be demand based rather than supply based and for interswitching to be made permanent.

“We are very encouraged that we have seen some momentum in this regard and the willingness of the federal government to address these issues,” said Vervaet.

  • Carbon pricing — Crushers consume a considerable amount of natural gas and electricity.

The proposed $50 per tonne national carbon tax would cost the industry an extra $30 million a year. COPA would like the federal government to offset those costs so the industry can remain competitive.

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