WINNIPEG, Manitoba/OTTAWA Sept 6 – Canadian canola piled up in commercial storage and on farms to an all-time high this summer, a government agency said on Friday, after top importer China significantly cut back its purchases earlier this year. Total canola stocks swelled to 3.9 million tonnes, up 55 percent from last year, Statistics Canada said. Supplies slightly exceeded the average trade expectation of 3.8 million tonnes.
The glut reflects lower demand, including a decline of 1 million tonnes in canola shipments to China year over year, Statscan said.
Chinese canola buying started drying up in the weeks after the December arrest of a Chinese business executive in Canada and China’s subsequent detention of two Canadians. Chinese officials have attributed reduced purchases from Canada to concerns about pests in shipments.
“Everybody would like to see something done about the China situation. (Big stocks) have highlighted how heavily reliant we are on one buyer,” said Brian Voth, president of IntelliFarm, a farmer advisory service in Manitoba.
“(It’s) a very cautionary tale.”
ICE November canola futures turned slightly negative after the report.
Canola stocks would have been even higher if not for surging demand from European buyers using canola oil in biodiesel production, Voth said.
Statscan pegged all-wheat supplies at 6.2 million tonnes, down 4.6% from last year and surpassing the average trade expectation of 5.2 million tonnes. Stocks of durum, the wheat used to make pasta, swelled 13.5% to 1.6 million tonnes.
Canada is one of the world’s largest wheat exporters and the biggest shipper of canola, a cousin of rapeseed used largely to produce vegetable oil.