U.S. demand for canola oil rising, with construction underway on new crush facilities

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The race is on among canola processing companies to supply growing demand in the U.S. for canola oil as a feedstock for lower carbon-intensity fuels.

Construction is underway on three of five planned canola crush projects in Saskatchewan, notes Chris Vervaet, executive director of the Canadian Oilseed Processors Association (COPA), in the interview below.

Cargill, Louis Dreyfus, and Richardson are all moving ahead on previously-announced expansions, which would boost total canola crush capacity in Canada by about 30 per cent.

“They’re at various stages of construction. That would represent, in total, roughly three to three and a half million tons of additional capacity that will come on once those plants are complete in the years ahead,” he says.

Chris Vervaet, executive director of the Canadian Oilseed Processors Association, at CropConnect ’24 in Winnipeg, Man.

Federated Co-op/AGT and Viterra have also announced plans to build new crush facilities in Regina, Sask. The massive Viterra project is currently under review as part of Bunge’s proposed acquisition of Viterra.

Vervaet says COPA is hoping to get a clearer picture of the impact the implementation of Canada’s Clean Fuel Regulation last summer has had on domestic demand in the near future, but in the meantime, canola oil exports to the U.S. have climbed dramatically.

According to the Canola Council of Canada (using data from Statistics Canada), Canadian canola oil exports to the U.S. surpassed 2.85 million tonnes in 2023, up from 2.01 million in 2022, and 1.89 million in 2021 (see chart below).

The U.S. has always been the largest market for canola oil exports, but  it’s also the fastest growing market due to the boom in biofuel demand, says Vervaet.

As for finding a home for more canola meal, with increased domestic crush capacity, exports in 2023 were up to both the U.S. and China.

Watch/listen to this conversation with COPA’s Chris Vervaet, following his presentation at CropConnect ’24 in Winnipeg:

 

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