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Potential US tariffs pose a major threat to canola growers, as 95% of canola oil crushed at Canadian plants is exported to the United States.
This threat is real, but there may be other outlets for canola this winter and spring that could support prices, according to a vegetable oil analyst from Germany.
One of the key options, at least for canola seed, would be the European Union.
"EU rapeseed production is low. EU stocks are low. We believe EU imports of rapeseed and canola will reach a record level close to 7.3 million tonnes," said David Mielke, market analyst at Oil World.
Mielke, who spoke via Zoom to an audience at the Manitoba Ag Days trade show held from 21 to 23 January in Brandon, noted that Canada's share of these imports could reach 1.4 million tonnes.
He added that oilseed crushing plants in Europe will need imports over the next six months, meaning Canadian canola exports to Europe could return to levels not seen since 2020.
Sunflower production in Ukraine and Europe was disappointing in 2024, so crushing plants will have to rely on oilseeds from other countries.
"Canadian canola imports into the EU will need to increase between January and June 2025," Mielke said.
That's good news for canola.
The bad news is the possibility of US tariffs and what could happen to canola oil and canola meal prices if President Donald Trump follows through on those threats.
Late Tuesday afternoon, Canada's Conservative Party issued a statement on the proposed tariffs.
Conservative Leader Pierre Poilievre called on the Trudeau-led government to "reopen Parliament now to pass new measures to control the border, agree on retaliatory measures against trade tariffs, and put forward a plan to save Canada's weakened economy."
Parliament has been suspended until 24 March.
"Our American counterparts say they want to stop the illegal flow of drugs and other criminal activity across our border. The Liberal government acknowledges that weak borders are a problem," Poilievre said in the statement. "That's why they announced a multi-billion-dollar border plan — a plan they cannot fund because they shut down Parliament, preventing MPs and senators from approving the money."
"We also need retaliatory tariffs, which require urgent parliamentary consideration. Yet the Liberals shut down Parliament in the middle of this crisis," he added.
Until the tariff issue is resolved, it will be difficult for Canada's canola industry to feel enthusiastic about demand from Europe.
The market is also trying to make sense of the chaos surrounding the tariffs.
Old-crop canola futures closed steady at $638.60 per tonne for the May contract, while new-crop contracts rose $2.50 per tonne to finish at $632.10.
Source: The Western Producer