OTTAWA: Export supplies of canola from Canada, the top shipper, will be undermined more significantly than crop for domestic consumption by the drought hurting the country’s production prospects, officials warned.
The AAFC farm ministry, cutting its estimate for Canada’s grains and oilseeds output this year by 4.5m tonnes, included a 625,000-tonne downgrade to the forecast the canola harvest.
The revision left the canola production estimate at a three-year low of 14.3m tonnes, down 1.26m tonnes year on year.
“Growing conditions are extremely challenging across the western half of the Prairies as the weather remains hot and dry,” AAFC said.
Exports vs domestic supplies
However, the ministry added that “conditions are significantly better across the eastern half of the Prairies with surplus moisture in regions”, and indeed highlighted ideas of significant localised differences in yield potential.
“The yield outlook remains highly uncertain with anecdotal reports suggesting that scattered showers and good sub-soil moisture is mitigating the effects of the drought across some regions,” officials said.
This variation in crop potential looks to be favouring areas which typically supply canola to domestic processors, rather than for export form Canada’s west coast ports.
“The heart of the drought in western Canada is occurring in a major draw area for canola exports, consequently shipments are expected to be pressured through the west coast.”
By contrast, for domestic crushers “local seed supplies are expected to be adequate as growing conditions are near normal in the catchment areas of most processing plants”.
