WINNIPEG — One might expect the dropping Canadian dollar to spur an increase of foreign buying of canola, but the truth is not so simple.
Conventional wisdom holds that buyers in other countries should find canola more attractive now that the loonie is sitting at a 12-year low relative to its U.S. counterpart.
However, other countries’ currencies are also weakening.
“It doesn’t necessarily make Canadian product cheaper if the guy buying it is in a country whose currency is falling faster than our dollar,” said Mike Jubinville of ProFarmer Canada.
Another issue facing canola is the turmoil in the Chinese market, where economic growth is slowing and where the government is allowing the currency to spur its exports.
Some analysts feel the uncertainty could slow Chinese demand for canola, but Jubinville is confident good prices will spark sales.
