Canadian grain company CWB has expanded its 2012-13 marketing program to include canola, a crop that was planted on a record 21 million acres of prairie farmland this year.
CWB president Ian White said the company will offer a canola pool this year but he acknowledged that total volumes could be relatively small and delivery points will be limited.
So far, CWB has been unable to reach canola handling agreements with major grain handling companies.
That means farmers who sell canola through CWB will have access to only 42 delivery points across Western Canada, including nine in Manitoba, 10 in Alberta, one in British Columbia and 22 in Saskatchewan.
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“Canola is a crop that we’re easing our way into and at this stage, we’re limited (in delivery options),” White told Reuters News Agency last week.
CWB’s decision to enter canola markets comes as prairie producers prepare for a large crop, although there are signs it may not be as large as first expected.
Last year, Canadian exporters shipped nearly eight million tonnes of canola seed to overseas buyers.
Nearly half of that went to customers in China and Japan, countries where the demand for oilseeds is strong, crush capacity is expanding and CWB has cultivated a solid reputation as a reliable supplier.
Despite significant cuts to its workforce, CWB has retained international offices in Tokyo and Beijing.
White said the company’s canola marketing program will focus primarily on export markets, but he did not rule out the possibility of selling some canola to domestic buyers, if the right opportunities arise.
“It (canola) is a business that we believe we can easily be involved in because it’s a commodity that’s easily (hedged) and we’ve already been, in the last couple of months, making some sales and doing some trading,” he said.
“We’re confident that we can do a pretty good job (marketing) to what we know are some international customers that are pretty keen to take some product from us.”
White said delivery options for canola growers are likely to improve as the CWB strikes agreements with domestic grain handling companies.
The CWB’s first pool return outlook for canola, issued Aug. 23, was $640 per tonne, basis in-store at Vancouver or Thunder Bay, Ont. Initial payments under the canola pool are expected to be announced in early September.
The deadline for farmers to commit production to the pool is Oct. 31, although the program could be expanded, pending market conditions.
