Canola is still struggling to get a toehold in China this year.
Little Canadian canola is booked for shipment to China, and the crop’s small premium over the Chicago soy futures market appears to be enough to strangle interest.
“I’ve heard we’re $10 (per tonne) out, but would they buy and how much if we got down to that level?” said
Nolita Clyde of Ag Commodity
Research.
Chinese canola interest is fickle and easily scared off by any price premium to soybeans. Soybean imports to China have expanded in recent years, but canola has had trouble consistently selling into the market.
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China’s rapeseed production has also fallen, as comparatively cheap American and Brazilian soybeans have flooded the market.
China has a long history of producing rapeseed that, unlike canola, has not had the strong tasting glucosinolates bred out. Recent reports say the Chinese love of strongly flavoured oils is waning and many consumers now want flavourless, inexpensive high quality oils, which has created an opportunity for soy oil. Refining rape oil makes its flavour similar to soy oil, but the soy product costs less, so rapeseed oil prices have fallen in China.
The Canola Council of Canada has been trying to improve canola’s image in China, but has had trouble differentiating canola from traditional rapeseed. Rapeseed, which is not commonly consumed by humans in North America, and canola are generally mixed together by Chinese crushers at processing plants, so canola loses its ability to position itself as a premium product.
Clyde said Canada needs to sell about 800,000 tonnes to China this year to avoid alarmingly high canola stocks. But unless canola prices drop further, the crop is unlikely to win a lot of Chinese business.
