(Bloomberg) -- The canola market in Canada, rattled by trade woes with China, is rebounding in tandem with a bullish jolt in global vegetable-oil demand.
Canola futures have rallied from September lows, and the market probably will be firm until at least the North American spring, Ken Ball, a senior commodity futures adviser at PI Financial in Winnipeg, Manitoba, said in a telephone interview. The veg-oil surge means canola “crushers are going strong and with margins like this, if they could be open 28 hours a day, they would be,” he said.
Edible-oil demand rose as soybean processing ebbed in China after the outbreak of African swine fever ravaged the hog herd, reducing the use of feed made from the oilseed. Palm-oil futures have surged, partly because of a trade spat between Malaysia, the second-biggest producer, and India, a leading buyer.
For canola and oilseeds, “world demand is still there,” Wayne Palmer, a senior market analyst at Exceed Grain Marketing in Winnipeg, said in a phone interview. “It’s been a crazy year: unprecedented moisture, the longest period of planting that the U.S. couldn’t get their crop in, reduced yields, a harvest from hell in Canada and in the U.S., and China not buying.”
Canola for March delivery has climbed more than 5% to C$477.10 ($363.50) a metric ton from a September low on ICE Futures U.S. The price could be C$50 higher absent the trade dispute with China, Palmer said.
READ: Canada Seeks WTO Bilateral Consultation in Canola Row With China
Canadian canola-oil output rose 8.4% in the four months ended November from a year earlier, government data showed, signaling higher demand. China is open to imports of the oil with no restrictions.
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