2025 canola market - Export challenges ahead
The 2025 canola market faces uncertainty due to an ongoing anti-dumping investigation by China and a smaller-than-expected Canadian crop says Farm Credit Canada, Economics.
While it may take time for China to conclude its probe—similar to the 18-month investigation into Australian barley in 2018—Canadian canola exports have been strong since the start of the crop year on August 1. China, which accounts for over 75% of Canada's canola exports, is currently driving this pace, which is running 10 weeks ahead of schedule.
Even if China reduces imports, Canada would only need to export an additional 3 million tonnes to meet the Agriculture and Agri-Food Canada (AAFC) target of 7.5 million tonnes for the 2024/25 crop year. The greater impact of the investigation is expected to be felt in the 2025/26 export season.
Canada’s canola crop for 2024 is estimated at just under 18 million tonnes, and demand from domestic processors is high, in addition to the strong export activity.
The canola crushing industry is set to process over 11.5 million tonnes this year, with the potential to increase processing to 12 million tonnes if exports slow further, depending on farmer deliveries.
A key factor is the demand for canola oil, which is competitively priced compared to other vegetable oils, such as soybean oil. Canola oil is already being used in U.S. biofuel programs, but uncertainties around U.S. biofuel policies for 2025 have created some market instability.
The market for the rest of the 2024/25 crop will largely depend on potential changes in U.S. biofuel policies and tariffs. However, the smaller crop size may help balance out the uncertainties.
As for the 2025/26 crop, FCC says China's investigation and potential weather impacts could lead to lower exports and higher stocks, which may depress prices.
Figure: Canola stocks-to-use and prices will be impacted by export levels and domestic crushing activity.
.png)
Source: Farm Credit Canada, Economics