The EU has been the top importer of Canadian Canola during the first seven months of 2019-2020, having purchased 1.2 million tonnes, followed by Japan at 1.22 million tonnes and China at 795,300 tonnes.

The EU uses the Canadian Canola to manufacture biodiesel and has increased its imports due to a poor rapeseed harvest in the EU. The sudden demand from the EU was ideal for Canadian growers as this coincided with a 71% decrease in Canola exports to China, due to  an export ban on product from Viterra and Richardson International.

As reported by HIS Markit, biodiesel demand in the EU was expected to increase by 12% to 17.8 million tonnes in 2020, up from 16 million tonnes in 2019, before the COVID-19 pandemic, but has been revised to decline by 8% to 13.7 million tonnes. Oil World has also forecasted a 3.9 million tonne reduction in world biodiesel production in 2020.

However, in favour of Canadian canola growers, the reduction in EU biodiesel demand is believed to be temporary. Alternative biodiesel feedstock supply has also decreased with the closure of restaurants due to COVID-19 affecting shipments of used cooking oil from Asia and Europe.

Additionally, EU rapeseed production is also likely to be low for another year. Production of rapeseed fell 15% to 17 million tonnes last year, but Oil World has predicted a slight increase to 17.3 million tonnes in 2020, if growing conditions remain favourable.

Source: producer.com – 16^th April 2020

Image by Jen? Szabó from Pixabay