Canada’s Canola Planting Prospects Dim After China Trade Tussle
(Bloomberg) -- Canola, Canada’s most-valuable crop, is losing its luster after a trade ruckus with China drove exports and prices down, damping the outlook for planting this year.
“I’m certainly not going to press to the higher side when it comes to acres” in the spring, Bernie McClean, the president of the Canadian Canola Growers Association and a farmer in Glaslyn, Saskatchewan, said in a telephone interview.
Canola futures just capped the third straight annual decline. In May, the price touched a four-year low in the aftermath of the trade upheaval. The oilseed recovered in December amid a global rally in vegetable oil. Prospects remained murky as fertilizer and chemical prices held up.
That leaves McClean joining Todd Lewis, the president of the Agricultural Producers Association of Saskatchewan, in scaling back canola to the minimal acres required for seasonal crop rotations.
The trade row with China is keeping a lid on canola as export prices in Vancouver drag down the broader market, said Neil Townsend, a senior analyst at FarmLink in Winnipeg, Manitoba.
The Vancouver price is “where all of the political angst with China is embodied,” he said. “We’re seeking out markets to sell canola to as opposed to having more demand than we have product for.”
Last week, futures reached an 11-month high as deliveries to elevators climbed.
“There seems to be lots of demand for canola, and producers aren’t having an issue in trying to move product,” Lewis, the association official who has a farm in Gray, Saskatchewan, said in a phone interview.
©2020 Bloomberg L.P.