Suddenly rising canola prices - gold rush mood in Canada

Canola (rapeseed) prices in Canada have suddenly soared to nearly a two-year high, amid diplomatic clashes between Ottawa and Beijing. In the meantime, however, exporters have evidently found ways of how the oilseeds from Canada can still reach buyers in China.
Chinese authorities have blocked canola deliveries from two Canadian exporters since March 2019 after police in Canada arrested the CEO of technology group Huawei at the request of the US.
But this conflict has not erased the Chinese hunger for canola. While China is now importing less canola directly from Canada, rapeseed or canola oil is now being bought in Europe and the United Arab Emirates, which is largely made from Canadian canola.
Last Tuesday, the prices of the Conola futures on the ICE rose to their highest level since October 2018, after the prices of the rapeseed futures on the derivatives exchange in China also rose. The reason for this is said to be a lower supply in Canada. All traders who are short on canola oil must now stock up on the stock market. There is a gold rush atmosphere there.
In the first eleven months of the current marketing period, China's canola imports from Canada fell 45%. Despite this, Canada was able to increase its exports by 9%. France, for example, imported three times as much as usual. The United Arab Emirates doubled their canola imports.
Canada is the world's largest producer of canola. The farmers made a total of $ 6.42 billion for their crops, more than any other crop. China, on the other hand, increased its canola and rapeseed oil imports from Europe, Russia and Australia. The vegetable oil was made partly from Canadian canola.
Since Canada is currently facing a very large canola harvest, farmers there are excited about the latest price development. You can now secure your prices on the futures exchange for the harvest that has been partially sold in advance.
Rapeseed production in the EU and UK is estimated at a 13-year low this year. That is why importers have secured supplies from countries whose currency is weak. Canada is one of them. The competition between the importing nations for rapeseed or canola seeds will probably be fierce in the coming months.

Hansa Terminhandel GmbH
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