Canada canola exports fall as price soars

Thu Mar 14, 2013 1:04pm EDT
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* Canada shipments down 17 pct 2012/13 YTD

* Canola price rising faster than soybeans, palm, rapeseed

By Rod Nickel

WINNIPEG, Manitoba, March 14 (Reuters) - Canadian exports of canola, a key source of vegetable oil, have fallen sharply as the crop becomes too expensive for importers after a disappointing harvest.

Canada, the biggest exporter of canola (also known as rapeseed), has shipped about 4.7 million tonnes of canola in 2012/13 through March 3, down 17 percent from the year-ago pace, according to the Canadian Grain Commission.

The small, dark oilseed is crushed mainly to produce vegetable oil, which is used to make french fries at McDonald's Corp and potato chips at Frito-Lay.

"When you look at the price of (vegetable oil) substitutes around the world, honestly I'm surprised people would buy any Canadian (canola) seed," said Tony Tryhuk, manager of commodity trading at RBC Dominion Securities. "The price-sensitive demand I think would go elsewhere. When you look at competing markets, we are expensive relative to them."

ICE Canada nearby canola futures have gained nearly 6 percent so far this year after a 14.5 percent advance in 2012. Chicago soybeans are up just over 2 percent so far this year, compared with 1 percent gains so far in 2013 for Paris rapeseed and Malaysian palm oil.

China, Japan and Mexico were the biggest importers of Canadian canola in 2011/12.   Continued...