PORTAGE LA PRAIRIE, Man. – Did somebody say $25 canola? You bet. And it caused waves of laughs and chatter among 80 farmers from marketing clubs in Manitoba.
At a recent seminar held here, a market analyst who supplies information to brokers and farmers said there’s a one in 10 chance that prices this year could rise to $25 per bushel.
John Duvenaud, who publishes the Wild Oats newsletter, said if Chinese demand stays strong and North America experiences “the one-in-10-year drought”, stocks would be staggeringly low.
He said analysts with Memphis, Tenn. market analysts Sparks Companies have predicted soybean prices of $10 (U.S.) if the U.S. has a bad crop. Because canola has twice the oil content of soybeans, and given the exchange rate, canola could reach $25, Duvenaud said
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Canola prices continue to hover around $9 per bushel because of growing Chinese demand. Although China is a poor country, it’s also a large one: “The reality is that the top 28 million Chinese are richer than the top 28 million Canadians,” Duvenaud said.
China’s economy has grown by 40 percent in the last three years. This indicates the wealthy are improving their diets. Vegetable oil consumption increased by 20 percent last year, and is projected to increase another 13 percent this year.
