WINNIPEG, Manitoba (Reuters) - State-owned Chinese agribusiness COFCO Corp [CNCOF.UL] looks to buy 2.5 million tonnes of Canada’s canola crop next year, a boost of more than one-third over its expected purchases this year as its Canadian office gets established, said the company’s global head of softseeds on Wednesday.
COFCO opened its Winnipeg, Manitoba, Canadian trading office in late 2016. It buys canola from export companies at ports, and has no plans to build crushing plants or country elevators in Canada that would allow it to buy directly from farmers, said Felix Mueller, who is based in Geneva for COFCO.
“So far things are working very well,” Mueller said on the sidelines of the Grain World conference in Winnipeg. “I can tell you there is no major investment in the pipeline at the moment. It’s more about building our corporation stronger with key suppliers and feed our demand.”
COFCO’s 2.5 million tonnes would represent some 14 percent of all the canola Canada produced last year.
About 2 million tonnes of that volume will be consumed in China after being processed into canola meal and oil, while the balance may be traded to other countries, including Pakistan, Mueller said.
China’s demand for canola is limited, however, by the country’s appetite for protein, which favors oilseed rival soybeans, he said.
In total, China is likely to import 4 million to 4.4 million tonnes of canola from Canada in the current 2017/18 crop marketing year, Mueller said.
In the previous year, Canada shipped 4 million tonnes of canola seed to China, according to Canadian government data.
Reporting by Rod NickelEditing by Jonathan Oatis and Sandra Maler