Agricultural Products:
Grains and Oilseeds > Canola
Canola
Canola seed, oil, meal, and biofuel (ethanol).
Over 70 percent of Canada's canola crop is exported around the world and its reputation as a safe and high quality product is well deserved and well known.
 In the five most recent crop years starting 2000/01, Canada produced an average of 6.2 million tonnes of canola seed per year. In the same time period Canada annually exported 3.4 million tonnes of canola seed, 706,000 tonnes of canola oil and 1.15 million tonnes of canola meal to markets around the globe. The total value of canola seed, oil and meal exports is about $2 billion. Depending on the year, canola is either Canada's first or second most valuable field crop (the other is wheat). In 2004, canola was Canada's largest crop by value.
Our principle seed buyers are Japan and Mexico. China and Pakistan are emerging as major seed buyers.
Canada is counting on demand for heart-healthy cooking oil to help boost canola production by 65 percent to 15 million tonnes by 2015. With trans fat usage scaling down or being banned in the major restaurant and fast food sectors, corresponding increase in the use of canola oil is the replacement choice.
Canada's canola industry adds over $11 billion in economic activity to the Canadian economy. More than 52,000 Canadian farmers grow canola - largely as full time farmers and in 'family farm' businesses. They depend on canola to generate between 1/3 and ½ of their revenues. Domestically, canola generates economic activity of $1.4 billion in Ontario and Quebec (primarily in the processing sector), and $7.5 billion in western Canada. The world is our market. Canola exports bring over $2 billion back to our Canadian economy, and represent 75% of our annual production. Exports have gone from making up 1 percent of our total exports to the rest of the world in 2000, to 4 percent in 2004.
The highest concentration of canola acreage is in the black and gray soil zones of Western Canada.
Today, nearly 40% of the vegetable oils consumed by Canadians are produced from Canadian-grown and processed canola. However, this represents only 20% to 25% of the crop grown each year, so the rest has to be exported.
Canada produces only 15% of the world's annual supply of rapeseed/canola but is responsible for roughly 75% of its global trade.
Canola exports could grow considerably but are being limited by barriers to trade, notably tariffs and subsidies in other countries. Canadian farmers and agribusiness held in storage roughly 2.5 million tonnes in 2005/2006, out of a total production of 9.7 million tonnes, due to depressed prices and access problems in export markets.
Over 50% of the edible oil consumed in Japan is canola oil. In Mexico it is 25%. Canola oil is the second most consumed oil in the U.S. (after soybean) representing 7.5% of that edible oil market.
Japan, Canada's best canola seed customer, bought an average of 1.7 million tonnes of canola seed a year since 2000/01 valued at $580 million.
Mexico, a growing and important market for Canadian canola, bought an average of 785,000 tonnes of canola seed a year since 2000/01 valued at $265 million. Purchases are expected to increase to between 1,000,000 and 1,500,000 tonnes per year. Mexico is also an increasingly important buyer of Canadian canola oil, with current purchases at about 50,000 tonnes per year.
In the past five years, China has emerged as a major market for Canadian canola. Since 2000/01, its average imports are about 550,000 tonnes of Canadian canola seed per year. China's annual purchases are highly variable and depend largely on their domestic oilseed supply and the price differential between canola and competitor products.
Korea has been importing Canadian canola oil for over a decade. Since 2000/01, it imported on average 27,000 tonnes/year valued at $18 million. While not a large importer, Korea represents a class of wealthier developing countries that could import significantly higher amounts of canola in the future.
Pakistan started purchasing Canadian canola in 2002 - almost 200,000 tonnes. Countries in this region, including Iran and India represent our greatest new market potential - possibly as much as 1 to 2 million tonnes of seed equivalent a year.
The current market development priorities for the Canadian canola industry are to expand canola oil consumption in the U.S., Mexico and Canada through increased promotion, and to open new markets in countries such as China, Pakistan and India.
Another key to the growth of the canola industry is increased standards of living in many of the world's developing nations. Trade liberalization will in part support that trend. With increased spending power, these consumers can afford to pay a premium for Canada's high-grade canola products.
(Canola Council of Canada)
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