Huge Canada canola crop boon to crushers, exporters after off year
By Rod Nickel
WINNIPEG, Manitoba, Sept 12 (Reuters) - Canada's expected record-large canola crop looks to re-stock the country's seed exporters and crushers after a disappointing previous harvest, and top up already growing global oilseed supplies, industry sources said.
Canada is the world's biggest producer of canola, which is mainly used to make vegetable oil for foods like potato chips and salad dressings. Statistics Canada pegs this year's harvest at 14.7 million tonnes, but many traders and analysts expect output to be even higher.
A bountiful harvest is just what Canadian crushers and seed exporters need after last year's 13.9-million tonne harvest left skimpy supplies by summer that inflated prices.
"We should have a fairly consistent or fluid pipeline for this entire year," said Dean McQueen, vice-president of merchandising and transportation at Viterra, one of Western Canada's two biggest crop handlers and owner of a canola plant in Manitoba.
This year's bumper crop comes amid concerns that hot, dry weather will trim production of U.S. soybeans, a rival to canola in the global vegetable oil market.
Even so, the U.S. Department of Agriculture forecasts global soybean production of nearly 282 million tonnes in 2013/14, an increase of 5 percent from the previous year. The world canola/rapeseed harvest is forecast around 66 million tonnes, up nearly 7 percent, while global palm oil output of 58 million tonnes also looks to rise 5 percent, according to USDA.
There are few worries, however, that canola demand can keep pace with supply.
"The cupboard was pretty bare at the end of (2012/13), so I don't see us having a huge excess of production lying around," said Kevin Price, senior trader for the Canadian office of Singapore-based Agrocorp International. Continued...