Canola sales lost to Europe

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Published: November 18, 1999

and Reuters News Agency

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China is buying canola seed, but Canadian suppliers are not getting in on the action because they can’t get the product to port.

In the last couple of weeks, China has purchased 300,000 tonnes of European seed. According to Xcan Grain Ltd., China will import 4.5 million tonnes of canola seed this year, more than double what it imported last year. But Canada won’t get a big a piece of that pie.

“The major, major problem is rail car allocation,” said Joe Toens, senior trader with Xcan Grain Ltd.

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Last week’s rail car allocation would permit a program of 70,000 tonnes of canola for a month of shipment, but Toens said they have sales levels higher than 200,000 tonnes per month.

The Canadian Wheat Board and other groups negotiated a split in rail cars, which is administered under the Car Allocation Policy Group. The board will get 70 percent and non-board users will get 30 percent of available rail cars this year.

An official with the Car Allocation Policy Group said the rail car allocation program was established in conjunction with the trade back in July. Since then the canola sales program has shot up. Car allocation numbers for canola will be reviewed in December.

Ian Morrison, a grains analyst with Agricore in Winnipeg, said Canada is booking sales for January delivery.

“Whereas I believe with the Australians and Europeans, you can buy for prompt shipments.”

On Nov. 5, European traders said China bought two cargoes of 50,000 tonnes each of rapeseed for shipment between Nov. 15 and Dec. 15. The rapeseed had originally been purchased from Canada, Chinese traders said.

A Winnipeg trader said China’s reduced interest might be due to higher Canadian canola prices compared to other world rapeseed.

As of Nov. 8, four CWB-designated and seven non-CWB vessels were waiting at the port of Vancouver. Most of the non-board vessels were taking canola.

Toens is responsible for filling some of those 50,000-tonne vessels with canola. He said one ship has been sitting at the port since Nov. 9. If he doesn’t find the product to fill that boat by Nov. 30, he will be forced to default on the contract.

“It would be the first time that Xcan is defaulting on a contract,” said Toens.

About the author

Sean Pratt

Sean Pratt

Reporter/Analyst

Sean Pratt has been working at The Western Producer since 1993 after graduating from the University of Regina’s School of Journalism. Sean also has a Bachelor of Commerce degree from the University of Saskatchewan and worked in a bank for a few years before switching careers. Sean primarily writes markets and policy stories about the grain industry and has attended more than 100 conferences over the past three decades. He has received awards from the Canadian Farm Writers Federation, North American Agricultural Journalists and the American Agricultural Editors Association.

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