Just how important is the European Union canola (rapeseed) market? According to LeftField Commodity Research, the region had more than doubled its year-over-year canola imports up to mid-March of this year, offsetting nearly half of the Canadian tonnage that would have been sold to China.
That’s a significant increase, says Jonathan Driedger with LeftField, driven by a perhaps permanent move away from rapeseed planting (linked to neonicotinoids being banned) and a poor 2019 growing season.
The import number to mid-March is also significant as it marks the beginning of the COVID-19 pandemic crisis hitting Europe and North America. Going forward, Driedger says that decreased oil and fuel prices may bite into biodiesel demand, too. Canola/rapeseed accounts for about 40 per cent of the biodiesel feedstock in the EU.
In a report published by Leftfield, Driedger says that canola/rapeseed demand could drop significantly, based on decreased fuel usage, but that the feedstock does perform favourably, perhaps limiting the downside risk. Either way, there is still more canola sitting at port waiting to head to the EU — how much new crop that ends up destined for the region will depend largely on how long the economic re-opening and recovery takes, domestic production, the Ukranian crop (a major competitor), and the price spread between Canadian canola and EU rapeseed.
Access the full report via Leftfield Commodity Research, here.
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