Canola crop recovery continues in Australia

Australian producers plan to increase production by 15 percent this year to 6.7 million acres. | File photo

Farmers expect their second good crop in a row following the end of a two-year drought in the country’s eastern region

Australia is going to harvest another large canola crop in 2021-22, according to the U.S. Department of Agriculture.

It believes the recovery that started in 2020-21 will continue in the upcoming crop year.

Planted area is forecast to increase by 15 percent to 6.7 million acres, according to a recent report by the USDA’s Foreign Agricultural Service (FAS).

The crop will be seeded between March and May and harvested from October through December.

The FAS is forecasting 3.9 million tonnes of production, slightly below last year’s bumper crop of four million tonnes.

That is based on average yields versus last year’s record yields.

The two-year drought in eastern Australia broke in early 2020 and there is now good soil moisture in New South Wales and Victoria as planting approaches.

“This soil moisture will give farmers confidence to shift area from winter grains to higher-risk canola,” said the FAS.

However, conditions are not as favourable in Western Australia, which typically accounts for nearly half of the country’s production and 70 percent of its exports.

The FAS is forecasting 2.9 million tonnes of exports in 2021-22, the same level as this year. Australia typically ships 80 percent of its exports to the biodiesel market in the European Union.

Most of the crop is shipped out in the December-through-March period and then volumes tail off considerably.

Jim Everson, president of the Canola Council of Canada, does not think another big Aussie crop will have much of an impact on Canada’s upcoming export program.

“There was a large crop last year in Australia and Canada still managed to have very strong, very robust seed exports and very solid oil and meal exports also,” he said.

In fact, Canada shipped out a record 11.8 million tonnes of canola in 2020, a 43 percent increase over the previous year.

MarketsFarm analyst Bruce Burnett said European rapeseed production is not expected to increase and acreage will be down in Ukraine due to challenging planting conditions.

So he agreed that the market should easily be able to absorb another large Australian crop.

“It’s still shaping up as a relatively tight year,” he said.

A lot will depend on whether Canadian yields return to normal after a down year.

He does not think the size of Australia’s crop will influence whether or not China lifts its import restrictions on Canadian canola in 2021-22.

However, there could be some changes if China has a disappointing rapeseed harvest contributing to the already tight global supplies of the crop, said Burnett. China is in the midst of harvesting its 2021 crop.

Everson said the challenges Canada has with China have nothing to do with supply and demand of the crop, so he doubts that Australia’s upcoming harvest will have any bearing on whether China decides to lift the restrictions in 2021-22.

He said there has been no change in the status of the dispute with China. The council and the Canadian government continue to push for opportunities to engage with China on the matter.

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