Canada Markets

Australia Eyes China for Increased Canola Sales

By Cliff Jamieson , Canadian Grains Analyst
China, Japan and Mexico together received 90% of Canada's canola exports in the 2012/13 crop year, with five other countries importing the remaining 10%. China's total imports were 2.735 million metric tonnes in 2012/13, while Japan imported 2.363 mmt and Mexico imported 1.354 mmt. (DTN graphic by Nick Scalise)

Since Australia signed a Memorandum of Understanding with China last spring which would allow imports of canola into China from all Australian ports except for three, approximately 500,000 metric tonnes have been shipped into the Chinese market. Despite a smaller Australian crop expected in 2013/14, estimated to be between 3.2 and 3.5 million metric tonnes as compared to last year's 4.2 mmt, theland.com reported that up to 1 mmt may be shipped to China in the 2013/14 crop year.

Australia welcomes this surge in Chinese business, with predictions made that China may be the country's No. 1 customer within five years, according to a representative of Australia's Grains Industry Market Access Forum. Australia's current trade with Europe is currently on the decline because of increased domestic production in Europe and in the Ukraine.

These additional supplies available to the Chinese market come at a crucial time for the Canadian industry as it seeks to push this year's gigantic crop onto the world market. As seen on the attached chart, China was Canada's largest customer in 2012/13, importing 38% of Canada's exported volume, totaling 2.735 mmt. China was also the largest customer in the 2011/12 crop year when Canada achieved record exports, importing 2.671 mmt or 31% of Canada's export volume.

Canada's exports to China in the first two months of this crop year were reported by the CGC to total 189,800 mt, which is roughly 50% of the exports to this country achieved in the first two months of the crop year achieved in each of the past two years, while the lowest August/September volume shipped to China since the 2010/11 crop year.

Canada's 2013/14 August/September canola exports totaled 706,300 mt, 37% below year-ago levels and the slowest start to the export program in years.


I will be attending Agri-Trade in Red Deer on No. 7 and 8. Feel free to drop by the DTN booth to say hi on either of these days, from 9 a.m. until noon and between 2:30 p.m. and 5 p.m. Hope to see you there!

DTN 360 Poll

Is the Canada-European Union free trade agreement a good one? According to our poll, 36% of respondents suggested they were very optimistic, while another 52% indicated they were cautiously optimistic. Four percent of respondents remain undecided, while 8% showed some degree of pessimism surrounding the benefits of the deal.

What do you think of the current backlog in shipping on the Prairies? Is it simply the size of the crops, or is it due to the railways? Perhaps it is the terminals? You can weigh in on this week's DTN 360 Poll. Your participation is appreciated!

Cliff Jamieson can be reached at cliff.jamieson@telventdtn.com

(ES)

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