BRANDON — The possibility of U.S. tariffs is a massive threat to canola growers since 95 per cent of canola oil crushed at Canadian processing plants is exported to America.
That threat is real, but there could be other outlets for canola this winter and spring, which should be supportive for price, says a vegetable oil analyst from Germany.
One of the main options, at least for canola seed, will be the European Union.
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“EU production (of rapeseed) is down. EU stocks down. We think EU rapeseed imports and canola imports will have to reach a record level of close to 7.3 million tonnes,” said David Mielke, a market analyst with Oil World.
The Canadian share of those imports could be 1.4 million tonnes, said Mielke, who spoke via Zoom to an audience at Manitoba Ag Days, a trade show held Jan. 21-23 in Brandon.
Oilseed crushers in Europe will need the imports over the next six months, which means Canadian exports of canola seed to Europe could rebound close to levels not seen since 2020.
Sunflower production in Ukraine and Europe was disappointing in 2024, so the crushers will rely on oilseeds from other countries.
“Canadian canola imports into the EU will have to increase, in January- June 2025,” Meilke said.
That’s the good news for canola.
The bad news is the possibility of American tariffs and what would happen to canola oil and canola meal prices if President Donald Trump acts on those threats.
Late Tuesday afternoon the Conservative Party of Canada (CPC) issued a statement on the proposed tariffs.
Conservative leader Pierre Poilievre called for Trudeau to “reopen Parliament now to pass new border controls, agree on trade retaliation and prepare a plan to rescue Canada’s weak economy.”
Parliament has been prorogued until March 24.
“Our American counterparts say they want to stop the illegal flow of drugs and other criminal activity at our border. The Liberal government admits their weak border is a problem,” Poilievre said in a statement. “That is why they announced a multibillion-dollar border plan—a plan they cannot fund because they shut down Parliament, preventing MPs and Senators from authorizing the funds.”
“We also need retaliatory tariffs, something that requires urgent Parliamentary consideration,” he added. “Yet, Liberals have shut Parliament in the middle of this crisis.”
Until the tariff mess gets sorted out, it’s difficult for Canada’s canola industry to get excited about demand in Europe.
The market is also trying to make sense of the tariff chaos.
Canola futures for old crop were basically flat, closing at $638.60 per tonne for the May contract. New crop canola was up $2.50 per tonne, finishing at $632.10.
Check out all our coverage of Manitoba Ag Days 2025 here.
Contact robert.arnason@producer.com
