With so much land planned for canola going unseeded, there is concern whether there will be enough canola to sell to all the hard-won canola buyers.“We may actually be OK,” said Dave Hickling of the Canola Council of Canada.“We certainly don’t want to see regular customers that have been buying canola for years not being able to buy canola. But I don’t think that’s going to happen.”Hickling said canola crops in many areas of the Prairies are healthy, so even with the new demand that’s coming on stream, there should be enough production to meet the needs.Ironically, China’s import restrictions should help because it cannot bring in more than about 1.5 million tonnes a year, so more will be left for other buyers.When production falls short, buyers often bid up prices to ensure their supply and encourage larger production in the future. Some would-be buyers balk at the higher prices and stop buying or buy a different crop as a substitute.That’s often referred to as the market rationing demand.Farmers like to see higher prices, but producer organizations have worked hard to build new markets and broaden the demand base.In the early 2000s, years of drought-reduced canola crops saw U.S. canola imports fall as relative prices rose.Hickling said since those days the industry has built good markets in many other places, including Pakistan, China and the United Arab Emirates, as well as expanded domestic crush. That new demand helps consume a crop that is now about triple what it was during the worst of the drought years, when less than five million tonnes were harvested.Hickling said there would be a problem supplying all the buyers if China’s border was wide open, but with only three ports open, that demand is limited. Last crop year, China imported about 2.8 million tonnes, but this year and next year 1.5 million will likely be the maximum.The most price-sensitive markets are now those with the biggest freight disadvantage, such as Pakistan, Bangladesh and the United Arab Emirates.“A few may receive less, but it’s way too early to say,” said Hickling.
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