Chris Beckman is sticking with the status quo despite all signs pointing to mounting canola demand from China.
Agriculture Canada’s oilseed analyst is using 2.5 million tonnes of exports to Canada’s top canola customer in his 2012-13 supply and disposition report, which is the same amount he has pencilled in for 2011-12.
Reports have surfaced that China will be hungrier for the crop in 2012-13 due to a disappointing winter rapeseed harvest.
Reuters says the China National Grain and Oils Information Centre is revising its estimate for this year’s rapeseed harvest to 12.5 million tonnes, down from 13 million tonnes last year due to heavy rains and strong winds.
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The centre is forecasting 2.5 to three million tonnes of canola and rapeseed imports in 2012, up from 1.26 million tonnes in 2011. Part of the reason for the increase is that the Chinese government is stockpiling domestic rapeseed, paying growers 8.7 percent more than last year’s price to boost their incomes.
Beckman is sticking with his forecast for Canadian exports to China remaining static in 2012-13 in spite of evidence of increased Chinese interest in the crop.
Canola and rapeseed imports from all sources jumped 308 percent during the first four months of 2012 compared to the same period a year ago.
There is one simple reason for Beckman’s obstinacy.
“We’re running out of canola,” he said.
“We’re going to be tight on exportable supplies despite the fact that we’re expecting to produce a record crop. The world demand right now just seems to be incredible.”
One thing that might prompt him to revise his export number is if the trade rumour that China may lift its blackleg restrictions in the second half of 2012 proves to be true.
That would allow Canadian exporters to resume shipping to processing plants in China’s rapeseed growing regions in addition to the port facilities that currently accept canola.
“What would probably happen is we might see a bump in Canadian price and then we might have to rob a little bit from our crush capacity to feed the export market,” said Beckman.
Even without those additional facilities taking product, Chinese demand is expected to be strong. They have been aggressive buyers of U.S. soybeans, locking up supplies much earlier than usual.
China’s growing need for soybeans and soybean oil is expected to spill over into canola markets but the tug-of-war between Canadian crushers and exporters means there could be some disappointed Chinese importers.
Beckman forecasts 8.35 million tonnes of Canadian exports to customers around the world in 2012-13, down slightly from 8.4 million tonnes in 2011-12 based on a slightly smaller total supply of the crop. Domestic crush will also drop to 6.88 million tonnes from seven million tonnes in 2011-12.
